Blockchain technology in accounting: advantages and limitations

Abstract

Introduction. The application of blockchain technology has a significant potential to increase the efficiency of accounting compared to the traditional system and will ensure the digital transformation of the accounting process. Problem Statement. The introduction of blockchain technology into the accounting system is at an initial stage and requires significant refinement due to existing limitations. Purpose. To carry out a comparative analysis of the advantages and limitations of using blockchain technology in accounting in comparison with traditional accounting. Methods. The main research methods were general and special scientific approaches to theoretical generalization and grouping, systematization, comparative analysis, logical generalization. Results. Substantiated that the relationship and functionality of the blockchain are perfectly combined with the basic logic of accounting systems. The immutability of the transactions recorded in the blockchain process, the strong ongoing control of the procedures and compliance guaranteed in each phase meet the cardinal principles of accounting summarized in terms of informative data reliability and transparency. Conducted a comparison between pre- and postblockchain accounting characteristics. This established the advantages of blockchaintechnology compared to traditional accounting. The study defines confidentiality issues, scalability and interoperability as important significant constraints for adoption and deployment of blockchain based accounting. Procedural automation of blockchain technology always requires support and monitoring of the correctness of the interpretation of accounting phenomena that require professional judgment. Identified groups of asset transactions that reflect a high probability of outcome uncertainty and measurement uncertainty. Conclusions. Blockchain integration in accounting at enterprises supports consistent with Ukraine's digital transformation strategy. Accounting from this technology perspective would significantly reduce the amount of time and effort used by accountants for traditional and repetitive daily accounting records and constant control over their reliability. The introduction of blockchain in accounting requires overcoming limitations, the main one is the need to make changes to transactions, which require adjustments due to uncertainty and require accounting judgment.