Blockchain consortia offer firms several advantages, including the ability to maintain a shared transaction ledger that is secure, verified, and agreed-upon by key business partners. While these benefits are largely derived from blockchain’s distributed architecture, this same architecture poses challenges to auditors working to provide assurance on a technology owned, operated, and maintained across several firms’ borders. Indeed, participating in a blockchain consortium transitions a firm from relying solely on its own IT infrastructure and processes, to being vulnerable to how other firms collectively maintain the shared ledger. As blockchain consortia grow and are used to process and record material transactions, members will require assurance that other members maintain the blockchain in a well-controlled manner. Given the complexities of auditing a distributed environment, this study proposes three design choices intended to improve the auditability of consortium blockchains. Practitioners then evaluate these designs and offer additional considerations/alternative paths forward.
{"title":"An Examination of Design Choices Intended to Improve the Auditability of a Consortium Blockchain","authors":"Mark D. Sheldon","doi":"10.2308/jeta-2022-023","DOIUrl":"https://doi.org/10.2308/jeta-2022-023","url":null,"abstract":"\u0000 Blockchain consortia offer firms several advantages, including the ability to maintain a shared transaction ledger that is secure, verified, and agreed-upon by key business partners. While these benefits are largely derived from blockchain’s distributed architecture, this same architecture poses challenges to auditors working to provide assurance on a technology owned, operated, and maintained across several firms’ borders. Indeed, participating in a blockchain consortium transitions a firm from relying solely on its own IT infrastructure and processes, to being vulnerable to how other firms collectively maintain the shared ledger. As blockchain consortia grow and are used to process and record material transactions, members will require assurance that other members maintain the blockchain in a well-controlled manner. Given the complexities of auditing a distributed environment, this study proposes three design choices intended to improve the auditability of consortium blockchains. Practitioners then evaluate these designs and offer additional considerations/alternative paths forward.","PeriodicalId":45427,"journal":{"name":"Journal of Emerging Technologies in Accounting","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2023-06-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41646021","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Zihao Zhang, Yu Gu, Lanxin Jiang, Wenjun Yu, Jun Dai
Peer-to-peer (P2P) lending enables individuals and small companies to finance and invest without the intermediation of financial institutions. However, this business model is also associated with high delinquency risk and a lack of risk monitoring and control capabilities. This paper explores the potential of the Internet of Things (IoT), blockchain, smart contract technologies, and the Continuous Risk Monitoring and Assessment (CRMA) framework to re-engineer risk monitoring and control for P2P lending. We conducted a case study of a large Chinese P2P lending company to identify problems in its current risk monitoring and control processes and to design an IoT-smart contract CRMA system to continuously monitor and respond to delinquency risk via real-time data collection, automatic loan settlement, and in-time risk disclosure. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M40; M41; M49.
{"title":"Internet of Things and Blockchain-Based Smart Contracts: Enabling Continuous Risk Monitoring and Assessment in Peer-to-Peer Lending","authors":"Zihao Zhang, Yu Gu, Lanxin Jiang, Wenjun Yu, Jun Dai","doi":"10.2308/jeta-2022-003","DOIUrl":"https://doi.org/10.2308/jeta-2022-003","url":null,"abstract":"\u0000 Peer-to-peer (P2P) lending enables individuals and small companies to finance and invest without the intermediation of financial institutions. However, this business model is also associated with high delinquency risk and a lack of risk monitoring and control capabilities. This paper explores the potential of the Internet of Things (IoT), blockchain, smart contract technologies, and the Continuous Risk Monitoring and Assessment (CRMA) framework to re-engineer risk monitoring and control for P2P lending. We conducted a case study of a large Chinese P2P lending company to identify problems in its current risk monitoring and control processes and to design an IoT-smart contract CRMA system to continuously monitor and respond to delinquency risk via real-time data collection, automatic loan settlement, and in-time risk disclosure.\u0000 Data Availability: Data are available from the public sources cited in the text.\u0000 JEL Classifications: M40; M41; M49.","PeriodicalId":45427,"journal":{"name":"Journal of Emerging Technologies in Accounting","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2023-05-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48150129","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-05-01DOI: 10.2308/jeta-19-06-01-28
Ahmed Gomaa, Mohamed Gomaa, Salem Lotfi Boumediene, Magdy Farag
ABSTRACT Reconciliation of transactions between multiple parties is a time-consuming process. This paper presents a new conceptual framework that may lower costs and shorten the reconciliation time. The proposed framework recommends recording transactions on the blockchain before populating the transacting parties’ respective enterprise resource planning (ERP) systems, which will be the source of a single truth. This information flow will result in all involved parties having access to the same transaction details. Further, the paper presents a technical feasibility demonstration with two examples, where all involved parties are executing transaction details on the blockchain after meeting the governing smart contract constraints using their digital wallets. The new conceptual framework has been specifically designed to create one truth for all parties involved in a transaction that in turn may eliminate what is perceived to be unnecessary redundancy in current accounting systems.
{"title":"The Creation of One Truth: Single-Ledger Entries for Multiple Stakeholders Using Blockchain Technology to Address the Reconciliation Problem","authors":"Ahmed Gomaa, Mohamed Gomaa, Salem Lotfi Boumediene, Magdy Farag","doi":"10.2308/jeta-19-06-01-28","DOIUrl":"https://doi.org/10.2308/jeta-19-06-01-28","url":null,"abstract":"ABSTRACT Reconciliation of transactions between multiple parties is a time-consuming process. This paper presents a new conceptual framework that may lower costs and shorten the reconciliation time. The proposed framework recommends recording transactions on the blockchain before populating the transacting parties’ respective enterprise resource planning (ERP) systems, which will be the source of a single truth. This information flow will result in all involved parties having access to the same transaction details. Further, the paper presents a technical feasibility demonstration with two examples, where all involved parties are executing transaction details on the blockchain after meeting the governing smart contract constraints using their digital wallets. The new conceptual framework has been specifically designed to create one truth for all parties involved in a transaction that in turn may eliminate what is perceived to be unnecessary redundancy in current accounting systems.","PeriodicalId":45427,"journal":{"name":"Journal of Emerging Technologies in Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135504453","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
ABSTRACT Accelerating climate change, deforestation, and pollution have turned a global spotlight on corporate sustainability. Many countries have issued standards on Environment, Social, and Governance (ESG) reporting, especially from heavily polluting companies. ESG disclosure has become a main channel for investors, the public, and other external stakeholders to understand companies’ impact on the environment. However, the current methods of collecting and processing environmental information are insufficient and infrequent, impairing stakeholders’ decision-making. Moreover, the complexity and diversity of environmental measures can inhibit information reliability, accuracy, and objectivity. We propose the use of Industry 4.0 technologies to improve existing ESG reporting processes and demonstrate a novel environmental reporting system that could allow a Chinese energy company to collect and report environmental information in real time, enhancing the completeness, reliability, and efficiency of their environmental disclosure.
{"title":"Industry 4.0-Enabled Environment, Social, and Governance Reporting: A Case from a Chinese Energy Company","authors":"Wenjun Yu, Yu Gu, Jun Dai","doi":"10.2308/jeta-2022-014","DOIUrl":"https://doi.org/10.2308/jeta-2022-014","url":null,"abstract":"ABSTRACT Accelerating climate change, deforestation, and pollution have turned a global spotlight on corporate sustainability. Many countries have issued standards on Environment, Social, and Governance (ESG) reporting, especially from heavily polluting companies. ESG disclosure has become a main channel for investors, the public, and other external stakeholders to understand companies’ impact on the environment. However, the current methods of collecting and processing environmental information are insufficient and infrequent, impairing stakeholders’ decision-making. Moreover, the complexity and diversity of environmental measures can inhibit information reliability, accuracy, and objectivity. We propose the use of Industry 4.0 technologies to improve existing ESG reporting processes and demonstrate a novel environmental reporting system that could allow a Chinese energy company to collect and report environmental information in real time, enhancing the completeness, reliability, and efficiency of their environmental disclosure.","PeriodicalId":45427,"journal":{"name":"Journal of Emerging Technologies in Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135399711","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-05-01DOI: 10.2308/1554-1908-20-1.i
{"title":"Covers and Front Matter","authors":"","doi":"10.2308/1554-1908-20-1.i","DOIUrl":"https://doi.org/10.2308/1554-1908-20-1.i","url":null,"abstract":"","PeriodicalId":45427,"journal":{"name":"Journal of Emerging Technologies in Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135145494","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-05-01DOI: 10.2308/1554-1908-20-1.327
{"title":"Editorial Policy","authors":"","doi":"10.2308/1554-1908-20-1.327","DOIUrl":"https://doi.org/10.2308/1554-1908-20-1.327","url":null,"abstract":"","PeriodicalId":45427,"journal":{"name":"Journal of Emerging Technologies in Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135145512","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Zhaokai Yan, Deniz Appelbaum, A. Kogan, M. Vasarhelyi
Audit data analytics is gaining increasing attention from both audit researchers and practitioners. To provide accounting students with firsthand experience utilizing data analytics, this teaching case showcases the implementation of data analytic techniques to transactional-level data from real-world business practice. Specifically, this case demonstrates the application of seasonal autoregressive integrated moving average (ARIMA) models, utilizing exogenous weather data, to predict daily sales amounts of a wholesale club retailer. The learning objective is to demonstrate this process and teach students to apply predictive data analytics through Python programming and incorporate and utilize exogenous data in sales prediction.
{"title":"Teaching Predictive Audit Data Analytic Techniques: Time-Series Forecasting with Transactional and Exogenous Data","authors":"Zhaokai Yan, Deniz Appelbaum, A. Kogan, M. Vasarhelyi","doi":"10.2308/jeta-2020-018","DOIUrl":"https://doi.org/10.2308/jeta-2020-018","url":null,"abstract":"\u0000 Audit data analytics is gaining increasing attention from both audit researchers and practitioners. To provide accounting students with firsthand experience utilizing data analytics, this teaching case showcases the implementation of data analytic techniques to transactional-level data from real-world business practice. Specifically, this case demonstrates the application of seasonal autoregressive integrated moving average (ARIMA) models, utilizing exogenous weather data, to predict daily sales amounts of a wholesale club retailer. The learning objective is to demonstrate this process and teach students to apply predictive data analytics through Python programming and incorporate and utilize exogenous data in sales prediction.","PeriodicalId":45427,"journal":{"name":"Journal of Emerging Technologies in Accounting","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2023-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41260532","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper aims to help students further understand employee reimbursement schemes, while simultaneously advancing the integration of data analytics in the accounting curriculum. The learning activity takes students through a comprehensive data analytics cycle to determine the root cause of employee expense reimbursement increases. The ability to leverage data analytics and possess technological agility to address business questions is an important skillset. Our paper contributes to the literature by presenting a resource that promotes the acceleration of integrating data analytics across the curriculum. The case topic is applicable to many classes, including audit (both external and internal), accounting information systems (AIS), financial, or forensic accounting, thereby promoting compliance with new accreditation standards requiring analytics throughout the curriculum. This case study helps expand the coverage of data analytics and learning experiences that emphasize the integration of information technology in the accounting curriculum. JEL Classifications: M40; M41; M42.
{"title":"J&S Publisher Problems: A Diagnostic Analytics Case Exploring Employee Expense Reimbursement","authors":"Jamie Hoelscher, Trevor Shonhiwa","doi":"10.2308/jeta-2021-011","DOIUrl":"https://doi.org/10.2308/jeta-2021-011","url":null,"abstract":"\u0000 This paper aims to help students further understand employee reimbursement schemes, while simultaneously advancing the integration of data analytics in the accounting curriculum. The learning activity takes students through a comprehensive data analytics cycle to determine the root cause of employee expense reimbursement increases. The ability to leverage data analytics and possess technological agility to address business questions is an important skillset. Our paper contributes to the literature by presenting a resource that promotes the acceleration of integrating data analytics across the curriculum. The case topic is applicable to many classes, including audit (both external and internal), accounting information systems (AIS), financial, or forensic accounting, thereby promoting compliance with new accreditation standards requiring analytics throughout the curriculum. This case study helps expand the coverage of data analytics and learning experiences that emphasize the integration of information technology in the accounting curriculum.\u0000 JEL Classifications: M40; M41; M42.","PeriodicalId":45427,"journal":{"name":"Journal of Emerging Technologies in Accounting","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2023-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49563844","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
ABSTRACT This paper proposes a new similarity metric, Vector Similarity Metric (VSM), which is as simple as the popular Cosine Similarity Metric (CSM). The CSM has a major deficiency. It yields the same value, irrespective of how different the two vectors are in their sizes so long as the angle between them is the same. This deficiency remains intact even when Natural Language Processing is used to associate semantic meanings to the words/phrases and when the term frequency is modified using Inverse Document Frequency. This deficiency becomes a serious concern when one is comparing the risk profile of one company with the risk profile of another company or investigating the changes in the risk profile of a company from one year to another. The VSM is based on the difference of the two vectors. The paper demonstrates the superiority of VSM over CSM analytically and through real-world examples.
{"title":"A New Measure of Similarity in Textual Analysis: Vector Similarity Metric versus Cosine Similarity Metric","authors":"Rajendra P. Srivastava","doi":"10.2308/jeta-2021-043","DOIUrl":"https://doi.org/10.2308/jeta-2021-043","url":null,"abstract":"ABSTRACT This paper proposes a new similarity metric, Vector Similarity Metric (VSM), which is as simple as the popular Cosine Similarity Metric (CSM). The CSM has a major deficiency. It yields the same value, irrespective of how different the two vectors are in their sizes so long as the angle between them is the same. This deficiency remains intact even when Natural Language Processing is used to associate semantic meanings to the words/phrases and when the term frequency is modified using Inverse Document Frequency. This deficiency becomes a serious concern when one is comparing the risk profile of one company with the risk profile of another company or investigating the changes in the risk profile of a company from one year to another. The VSM is based on the difference of the two vectors. The paper demonstrates the superiority of VSM over CSM analytically and through real-world examples.","PeriodicalId":45427,"journal":{"name":"Journal of Emerging Technologies in Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135703177","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Professional skepticism is a fundamental and critical construct for audit professionals. Although accounting regulators, practitioners, and CPA examinations call for explicit consideration of cyber risks by current and future audit professionals, the current body of literature has not examined the effects of professional skepticism in the context of cybersecurity-related tasks. This study focuses on the effect of professional skepticism on accounting students’ performance in cybersecurity (ASPC). Based on a sample of 115 graduate accounting students, we found that the students did not consistently understand cybersecurity fundamentals. Our study identifies personality traits and operating stress as antecedents of professional skepticism, and these antecedents affect ASPC indirectly through professional skepticism. The results indicate that professional skepticism directly and positively affects ASPC. In addition, cybersecurity knowledge and age positively and directly affect ASPC. The results of this study have implications for academics, accounting education, and the audit profession. Data Availability: Data are available on request from the authors. JEL Classifications: D91; M42; O33.
{"title":"Exploring Antecedents of Professional Skepticism on Accounting Students’ Performance in Cybersecurity","authors":"Yueqi Li, S. Goel, K. Williams","doi":"10.2308/jeta-2022-043","DOIUrl":"https://doi.org/10.2308/jeta-2022-043","url":null,"abstract":"Professional skepticism is a fundamental and critical construct for audit professionals. Although accounting regulators, practitioners, and CPA examinations call for explicit consideration of cyber risks by current and future audit professionals, the current body of literature has not examined the effects of professional skepticism in the context of cybersecurity-related tasks. This study focuses on the effect of professional skepticism on accounting students’ performance in cybersecurity (ASPC). Based on a sample of 115 graduate accounting students, we found that the students did not consistently understand cybersecurity fundamentals. Our study identifies personality traits and operating stress as antecedents of professional skepticism, and these antecedents affect ASPC indirectly through professional skepticism. The results indicate that professional skepticism directly and positively affects ASPC. In addition, cybersecurity knowledge and age positively and directly affect ASPC. The results of this study have implications for academics, accounting education, and the audit profession. Data Availability: Data are available on request from the authors. JEL Classifications: D91; M42; O33.","PeriodicalId":45427,"journal":{"name":"Journal of Emerging Technologies in Accounting","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45212287","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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