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ABSTRACT Blockchain technology has been a disruptive force in currency, supply chain, and information sharing practices across a variety of industries. Its usage has only recently expanded into assurance and financial reporting. This paper explores blockchain's impact in these areas and provides guidance for organizations and auditors utilizing blockchain by addressing financial data integrity issues, financial reporting risks, and implications for external auditors and firms' corporate governance practices. Organizations utilizing blockchain must adapt their policies and procedures over internal controls and counterparty risk assessment to address increasing regulation over the distribution of financial data, while their audit committees must be prepared to address these challenges leading up to financial statement preparation. External auditors need to assess blockchain implementation as a financial reporting risk and balance the potentially more reliable and timelier audit evidence obtained from blockchain-based reporting systems against the related increase in internal control testing.
Smith et al. (Fri,) studied this question.