The next area to disrupt: How does blockchain affect the audit industry? (part2)


Our research results show that blockchain technology will affect the audit industry in at least six key aspects.

First of all, blockchain technology will save time for the collection of certain data and documents that can be automatically controlled, as well as the substantive testing of transactions. Auditors can use the time saved to bring more added value to customers by strengthening the analysis of other risk areas or existing control systems.

Our research results are consistent with the research results of Liu et al. (2019), and both show that blockchain technology can help audit companies optimize auditors’ time, allowing them to provide customers with more valuable work, such as proposing advanced risk predictions Solutions, in-depth analysis of errors and abnormal situations in the management and control system. This is also in line with the views of Rozario and Thomas (2019), who pointed out that blockchain technology will change the audit process and increase its efficiency by automating data flow.

Second, blockchain technology will allow auditing of all customer data, not just sampling. This will enable auditors to discover most of the errors and anomalies in the client’s system, thereby improving the quality of the audit. This is consistent with the research results of Liu et al. (2019), which shows that blockchain technology will allow full coverage of customer data and make audits more relevant.

This result is also consistent with the research results of Kokina et al. (2017). Kokina et al. (2017) support the advantage of blockchain technology in that it can reflect all anomalies in the transaction group, rather than generating conclusions from samples.

Third, the blockchain will change the audit process, and the audit process will focus more on internal control testing rather than transaction substantive testing. Since blockchain technology will ensure the security of transactions and verify them, thanks to the blockchain community, the auditor can shift his audit work to a more in-depth study of the quality of the implemented control system, such as blockchain The quality of the code, the change of the agreement, the distribution of power between peers, etc., all of which will significantly improve the relevance of the audit.

This result confirms the research view of Liu et al. (2019), who believe that the blockchain will strengthen the auditing company’s testing of the internal control system, rather than the transaction substantive test verified by the various participants of the blockchain.

Fourth, blockchain technology will allow the establishment of a continuous audit process based on current data, and it will be conducted in real time. By replacing marginal audits based on historical data, this new method will improve the efficiency and relevance of audits, making auditors an important participant in the adoption of blockchain technology. The audit will allow timely detection of anomalies and errors and systematic improvement of the customer’s internal control system.

This is consistent with the view of Kokina et al. (2017), who pointed out that blockchain technology provides the possibility to perform audits more frequently and even continuously, because transaction blocks cannot be modified before auditing. This result is also consistent with the views of Dai et al. (2019), who proved that blockchain technology can be used by auditors to perform audits and real-time monitoring, thereby pushing the industry to a new generation: the “Audit 4.0 Era”.

This result is also consistent with Dai and Vasalelyi (2017) and Rozario and Vasalelyi (2018), who believe that blockchain technology not only provides timely access to transactions, but also realizes the automation of recording and verifying transactions.

Obviously, the biggest advantage of this method is the ability to prepare reliable and true financial statements.

Fifth, blockchain technology will allow auditors to play a more strategic role for their clients. The availability of data and the time saved on other tasks will make it possible for auditors to conduct in-depth analysis of the data and come up with relevant and useful explanations for making decisions, improving efficiency, and predicting trends. This kind of analysis and advice provided to customers is considered by some stakeholders as a service with little added value, but blockchain technology will enable such services to improve the usefulness and relevance of audits.

Therefore, this technology will enable auditors to establish the legitimacy of their important strategic role as customers. These results are consistent with the results of Rozario and Thomas (2019), who show that blockchain has the potential to improve audit quality and reduce the gap in expectations between auditors, users of financial statements, and regulators.

Finally, blockchain technology provides auditors with opportunities to expand their business by proposing new services, such as real-time auditing, assisting customers in establishing technology or adopting best practices, coordinating blockchain participants, change management and blockchain management. This result is also consistent with the prediction of Liu et al. (2019), which predicts that blockchain technology will improve new consulting services and develop new auditors’ businesses.

For accounting firms, in order to meet the challenge of improving the audit process and providing new services, two prerequisites are indispensable.

First of all, audit firms must take the lead and invest a lot of money to adapt and master this technology. This includes recruiting employees with new technical skills, as well as acquiring start-ups that specialize in data analysis and the blockchain industry, and training existing employees so that they can adapt to future challenges. Secondly, accounting firms must develop a culture of innovation in all business sectors to ensure that the development of their services can adapt to new market demands.

In addition, the development of blockchain technology, along with the development of the audit profession, will bring new legislation, supervision and regulation issues.

Since auditing is a regulated and standardized corporate activity, blockchain technology requires lawmakers to adjust regulations to cover technical restrictions and access to customer data. In addition, it is necessary to formulate new audit standards, especially audit standards covering the audit process (mainly ISA 315, ISA 320, ISA 330, ISA 501, ISA 500), etc. (Manita et al., 2020).

Finally, the use of blockchain technology can also cause ethical issues. Legislators must supervise each other’s professional ethics practices to deal with all risks of independence and infringement of customer confidentiality. To support the development of the audit profession, there are still several challenges to be solved.

Conclusions and limitations

1. Conclusion

The purpose of this article is to study how blockchain technology will affect the audit industry to understand the necessary qualities that auditors must prepare to adapt to the development of the audit industry. This research is helpful to papers on the digital transformation of audit companies and papers on blockchain as a special technology.

This article expands the discussion about the possible impact of blockchain technology on the audit process and the evolution of internal control of auditing companies (Rozario, Thomas, 2019). It shows that the use of blockchain technology as a system for processing, storing and exchanging information will have a multi-faceted impact on the audit industry and open the way for the development of new services.

This research also helps to enrich papers on audit quality (Dai, Vasarhelyi, 2017; Manita et al., 2020). Research has shown that blockchain technology can significantly improve the quality of audits by implementing a continuous audit process, auditing and testing all company data, and ensuring the security of transactions for all stakeholders.

Finally, on a practical level, this research informs the industry about the possible impact of blockchain technology on the audit process and consulting services. It has identified five areas in which practice must be developed to better meet the needs of audit clients and make audits more relevant.

This research shows that the audit process must develop in the direction of continuous auditing. The focus of this audit is not historical data, but recent data. It should also evolve into an audit process that checks all data, not just a sample of a small part of the data. Finally, it must greatly simplify information verification testing and pay more attention to existing internal control testing and in-depth analysis that brings significant benefits to customers.

This research also shows that blockchain technology will transform the role of auditors from a simple controller to a true strategic consultant, who will support the company in the development of its business and its information and control systems. This research informs legislators and regulators of the need to update audit standards, ethics rules, and industry regulatory texts to meet the particularities of this technology.

Therefore, the auditor profession faces major challenges. Auditors face a market where blockchain technology is increasingly being widely used in almost all industries. Therefore, auditors have no choice but to invest heavily in blockchain technology to expand their skills and knowledge in this field, and to anticipate and respond to customer needs. Otherwise, other companies specializing in digital services will compete with audit companies.

In order to do this, accounting firms must invest in recruiting technical staff and adjusting their internal organization to establish their ongoing audit services. They must also master the skills of blockchain governance in order to become essential participants in the development and verification of information. In addition, accounting firms should establish a culture of innovation and customer satisfaction survey mechanisms at all levels of their services.

Finally, they can combine blockchain with other technologies (big data, robotics, analysis) to develop new consulting services, such as internal control design, assistance in implementing blockchain technology, change management, and blockchain governance.

2. Limitations and future research directions

Our research has certain limitations. First, given our limited sample size (17 people participated in the survey), it cannot exceed the exploratory framework. Since our research focuses on a technology, and the application of this technology is not generalized, the professional’s view of the impact of adopting this technology on the audit profession may change.

In addition, this research did not involve the negative impact and cost issues of blockchain technology on the audit industry. In fact, some authors believe that blockchain technology will have some negative effects on the accounting and auditing industry, and believe that it will disrupt the entire accounting and auditing industry (YeMaCK, 2017; Schmitz, Leoni, 2019).

These authors believe that although blockchain technology is a promising technology that can increase trust among different stakeholders, the benefits it can bring to the industry and its ability to detect fraudulent transactions are still limited. While we persist in facing the challenges of the future, we have not studied the possible changes in careers.

The new research direction is meaningful. First, we can study the influence of blockchain on the internal control system and financial situation preparation process. We can also study how this technology will affect the company’s recruitment policies. Finally, we can study the impact of blockchain technology on small audit companies, whose human and financial resources are not as good as the four major audit companies.


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