Digitization Technologies and Contributions to Companies towards Accounting and Auditing Practices
Muhammad Fahmi*, Iskandar Muda, Sambas Ade Kesuma
Universitas Sumatera Utara, North Sumatera, Indonesia
Email: [email protected]*, [email protected],
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Article Information |
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ABSTRACT |
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Received: February 19, 2023 Revised: February 28, 2023 Approved: March 20, 2023 Online: March 24, 2023 |
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The purpose of this study is to examine the development of digital technology, including blockchain technology, cloud computing and big data contributing to companies, as well as accounting and auditing practices. The study method uses a systematic literature review (SLR) with a bibliometric approach. The results of the study show that the consistent use of blockchain technology, cloud computing and big data has contributed to increasing organizational effectiveness and efficiency, but the problem of high costs, as well as data security and confidentiality are the most important issues in using these three digital technologies. |
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Keywords |
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blockchain; cloud computing; big data; accounting; auditing |
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INTRODUCTION
The existence of digital technology contributes to the company's strategic and competitive achievements, it also influences innovation, implementation and changes in the company's business model (Nambisan et al., 2019; Teece, 2018). In addition, digital technology innovations contribute to the implementation of accounting information systems (AIS) and management control systems (MCS) in the public and private sectors (Agostino et al., 2021; Mancini et al., 2017). However, on the other hand, it is estimated that the increasing use of automated digital technology will have major consequences for a number of professions in the future (Frey & Osborne, 2017), this estimate reinforces the emergence of the assumption of "technological unemployment" if there is no intervention by the government (Joon et al., 2017). This study aims to examine the development of digital technology, including blockchain technology, cloud computing and big data contributing to companies, as well as accounting and auditing practices.
METHODS
Based on the formulation of the problem of this study, the researcher used a systematic literature review (SLR) with a bibliometric approach. Bibliometric analysis is used to see research trends and measure research progress by evaluating articles.
RESULTS
From the results of a systematic literature review (SLR) analysis using a bibliometric approach, the contributions and limitations of applying block chain technology, cloud computing and big data to companies, as well as accounting and auditing practices, are as follows.
Table 1. Contributions and limitations of blockchain technology, cloud computing and big data
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Digital Technology |
Contributions and Limitations |
Writer |
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Blockchains |
Contribution: |
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Assist auditors and accountants on financial reports |
(Cai & Zhu, 2016; Schmitz & Leoni, 2019; Secinaro & Mas, 2022) |
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Efficient and effective and the safest platform for storing and processing data |
(Shetty et al., 2022) |
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Limitations: |
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Changes in cryptocurrency and bitcoin transaction management have implications for financial accounting and management accounting. |
(Lardo et al., 2022; Xu et al., 2019) |
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Data confidentiality and cyber security |
(Bons & Bednárová, 2019; Guo & Liang, 2016; Jun, 2018; Secinaro & Mas, 2022; Xu et al., 2019) |
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Cloud computing |
Contribution: |
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Cost savings and space effectiveness |
(Okai et al., 2014) |
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Increase data availability |
(Abubakar et al., 2014; Ting & Liu, 2020) |
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Limitations: |
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Cloud fees and hidden fees from cloud service providers |
(Cegielski et al., 2012; Chang et al., 2019; Walterbusch et al., 2013) |
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Cyber security |
(Aleem & Sprott, 2013; Cegielski et al., 2012) |
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Insufficient knowledge |
(Aydin, 2021) |
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Adapts to old applications |
(Ramchand et al., 2021; Sastararuji et al., 2022) |
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Big data |
Contribution: |
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Company performance |
(Shabbir et al., 2020) |
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provide valuable services to customers, manage potential risks, identify irregular activities, and build efficient business models |
(Nobanee et al., 2021) |
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Auditing |
(Castka et al., 2020; Cockcroft, 2018; Gepp et al., 2018; Hasan et al., 2020) |
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Accountancy |
(Rezaee & Wang, 2018) |
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Machine learning |
(Hasan et al., 2020; Nissim, 2022) |
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Limitations: |
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Security and confidentiality as well as data quality |
(Nobanee et al., 2021; Rafiq et al., 2022; Rezaee & Wang, 2018; Torre et al., 2018) |
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Conflict between units |
(Andreassen, 2020) |
The existence of blockchain technology has a positive contribution to auditors and accountants, where hybrid blockchain technology will maintain the confidentiality of company information, help auditors and accountants to handle customer information, while guaranteeing the innovation of the auditor and accountant profession (Secinaro & Mas, 2022), blockchain technology is very effective in preventing information fraud (Cai & Zhu, 2016) and block chain technology can improve the efficiency of recording, reconciliation and auditing of accounting data, and at the same time accountants and auditors can save costs and time for carrying out tasks and reduce the risk of human error (Schmitz & Leoni, 2019), the speed with which blockchain technology generates information, is considered to be an efficient and effective and secure platform for storing and processing data (Shetty et al., 2022), on the other hand blockchain technology raises problems of cryptocurrency and bitcoin transactions which have implications for financial accounting and management accounting, so that process management is needed to change the business model, cryptocurrency has an impact on new transactions on financial statements, so the IASB issues special standards regarding cryptocurrency (Lardo et al., 2022; Xu et al., 2019), and potential bottlenecks of blockchain chain technology due to the lack of adequate guarantees about data confidentiality and cyber security (Bons & Bednárová, 2019; Guo & Liang, 2016; Jun, 2018; Secinaro & Mas, 2022; Xu et al., 2019).
Digital technology creates an unavoidable development of cloud technology (Aleem & Sprott, 2013), so it takes an institutional role through top management to implement cloud computing technology (Adjei et al., 2021; Kumar et al., 2017). Studies (Ting & Liu, 2020) the implementation of a modern accounting data analysis platform based on cloud computing technology can improve the statistical analysis of accounting data, and the cloud computing technology platform provides certainty of the availability of information technology data (Abubakar et al., 2014). The use of cloud computing technology can save costs and reduce data storage space (Okai et al., 2014), but the delay in adopting cloud computing technology is due to the high cost of making cloud (Cegielski et al., 2012; Chang et al., 2019), hidden costs from cloud service providers so that there are additional costs for using cloud computing services (Walterbusch et al., 2013), security problems from organized cyber in cyberspace (Aleem & Sprott, 2013; Cegielski et al., 2012), inadequate knowledge for the use of cloud computing technology (Aydin, 2021), as well as, the issue of migrating from legacy apps to unsuitable cloud platforms (Ramchand et al., 2021; Sastararuji et al., 2022).
Study of literature (Cockcroft, 2018) shows the development of the use of big data in industrial areas, such as the service industry, the banking and financial industry, and also, the development of big data analyzing customers, then, trade signals and fraud prevention. The development of big data is because it is useful for companies as an important tool for managing large volumes of business data, providing valuable services to customers, managing potential risks, identifying irregular activities, and building efficient business models (Nobanee et al., 2021). Big data in the financial industry contributes to real-time understanding of the stock market through trade and investment changes, fraud detection and prevention, accurate risk analysis through machine knowledge processes (Hasan et al., 2020), so that big data has implications for improving organizational performance (Shabbir et al., 2020). Big data has contributed to improving the quality of audit practices (Cockcroft, 2018; Gepp et al., 2018; Hasan et al., 2020). Auditing combined with technology will provide significant improvements in reliability/correctness and timeliness for social and environmental audits (SEA), closing important knowledge gaps and better informing decisions, where decisions are made based on audit conclusions (Castka et al., 2020). However, in the application of big data there are still several problems which are important issues, including security of confidentiality and inadequate data quality (Nobanee et al., 2021; Rafiq et al., 2022; Rezaee & Wang, 2018; Torre et al., 2018) and studies (Andreassen, 2020) found evidence that the application of big data and digital technology contributed to changes in the role and identity of heterogeneous management accountants as a competing profession.
CONCLUSION
Blockchain technology has a contribution to companies, as well as accountants and auditors, for companies, blockchain technology provides efficiency and effectiveness as well as the safest platform for storing and processing financial and non-financial data, and assists auditors and accountants in carrying out their professional services. The main problem with blockchain technology is that there is no adequate guarantee regarding data confidentiality and cybersecurity.
For companies, cloud computing technology provides certainty of the availability of information technology data, and provides benefits in the form of cost savings and reduced data storage space, but the main obstacles to the adoption of cloud computing technology are high costs, data security problems, low knowledge about cloud computing technology, and migration to unsuitable cloud computing applications.
Big data has a contribution for companies to establish customer-based strategies, big data can manage potential risks, identify fraudulent activities, and build efficient business models, but the main problem with using big data is security from confidentiality and inadequate data quality.
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