Is the Efficiency of Blockchain Technology from an Accounting Perspective Adequate or 4- Dimensional Customized Entry and Reporting System Required?
The paper aims to understand the chronological changes and dimensions in accounting. The paper is focused on presenting the relationship among modern technology i. e Accounting 4.0. The paper aims to analyze the efficiency of Blockchain technology from accounting, reporting, and governance perspectives. Also, an attempt has been made to present a more efficient 4-Dimensional Customized Entry and Reporting System to improve the efficiency of Blockchain Technology from various accounting perspectives. Data has been collected through a structured questionnaire to know the efficiency of blockchain technology from an Accounting Perspective. Kruskal Wallis test has been used to test the hypotheses. The adequacy of efficiency of blockchain technology from an accounting and auditing perspective is found adequate, but it is not found a significant technique to present financial reporting and to maintain corporate governance. The demand for more specified, robotic, trustworthy, and customized accounting has been generated. A new ideology was evaluated to make accounting and financial reporting more trustworthy among stakeholders in form of four-dimensional accounting technology in the area of accounting.
Introduction
According to a global forecasting report “Market size of the blockchain is forecasted to USD 67.4 billion by 2026 from USD 4.9 in the year 2021, at a Compound Annual Growth Rate (CAGR) of 68.4% by 2026.” It shows that the emergence of this technology has made a revolutionary change in market size and growth in the area of Accounting. Changing scenarios and dynamic development in techniques have transformed the traditional bookkeeping and accounting system and replaced it with a more secure triple accounting system. Accounting is now assembled with technology. So this is the time to join technology with accounting and focus on Acco-tech. For providing optimum services accounting has turned towards machine learning.
The emerging blockchain technology, according to the chairman of the Wall Street Blockchain Alliance, “now gives us a powerful method to share and access value.” The application of blockchain accounting in presenting financial reports has increased, as it has the potential to reduce fraud and increase transparency and trust. Blockchain is expected to transform the present accounting system and potential applications that can strengthen the timeliness, quality, and accuracy of accounting information.
There is a need to study the applicability of blockchain technology to the normal accounting cycle in emerging economies. Changing time keeps the business away from the technique applied in the last six centuries, the traditional accounting system. Blockchain can improve financial reporting, transparency, and monitoring aspects of corporate governance. The demand for more specified, robotic, trustworthy, and customized accounting has been generated. There is the requirement for a dynamic 4-dimensional Customized Entry and Reporting System.
Review of Literature
Based on the review of the literature, it is tried to present the need for triple entry that goes to blockchain technology and to measure the efficiency of the disruptive technology:
- Pappalardo et al. (2018): Inefficiencies of the Bitcoin system demonstrate that when a large fraction of transactions is not processed timely, severe issues arise regarding dependable time-stamping applications and incentive structures.
- Ojo PhD (2019): Highlights that in financial reporting, the combination of Artificial Intelligence (AI), vertical integration, and blockchain systems will inevitably expand.
- Sharma (2020): Discusses how blockchain enhances supply chain collaboration, trust, inventory turnover, productivity, and eliminates reliance on paper-intensive manual methods.
- Rahmawati et al. (2021): Blockchain reduces fraud, simplifies reconciliations, enhances audit efficiency, and improves statutory compliance across accounting functions.
- Supriadi (2020): Demonstrates how blockchain enables auditors to conduct seamless audit traces, asset ownership verification, and transaction authentication.
- Kolesnikov et al. (2020): Evaluates cyber-physical systems integrating multi-agent frameworks, IoT, Big Data, and blockchain to solve complex logistic and operational problems.
- Pignatti (2020): Analyzes blockchain applicability in e-identities, asset registries, tax compliance, and public administration smart contracts.
- Pedreño, Gelashvili, and Nebreda (2021): Concludes that blockchain will radically transform traditional accounting paradigms following ongoing technological advances.
- Is blockchain technology adequately efficient and effective in accounting, auditing, financial reporting, and corporate governance perspectives in comparison to traditional accounting systems?
- Is there any need to improve this three-layer-based blockchain technology to make it more efficient from various perspectives?
Research Methodology & Hypotheses
Exploratory research design based on literature review and empirical survey.
Primary data via structured questionnaire covering accounting, auditing, reporting, and governance.
220 questionnaires sent; 132 fully completed and utilized. Analyzed using Likert 5-point scale.
Kolmogorov–Smirnov normality test (non-normal data); Kruskal-Wallis Test applied for hypotheses.
Hypotheses Formulated:
- H01: There is no significant difference between the efficiency of traditional and Blockchain technology of a firm from an accounting perspective.
- H02: There is no significant difference between the efficiency of traditional and Blockchain technology of a firm from an auditing perspective.
- H03: There is no significant difference between the efficiency of traditional and Blockchain technology of a firm from a financial reporting perspective.
- H04: There is no significant difference between the efficiency of traditional and Blockchain technology of a firm from a corporate governance perspective.
Result and Discussion (Kruskal-Wallis Test Results)
Table 1: Test Statistics – Accounting Perspective (H01)a,b
a. Kruskal Wallis Test | b. Grouping Variable: 2D TO 3D
| Statistic | AC1 | AC2 | AC3 | AC4 |
|---|---|---|---|---|
| Chi-Square | 15.117 | 12.218 | 7.613 | 7.867 |
| df | 3 | 3 | 3 | 3 |
| Asymp. Sig. (p) | .002 | .007 | .055 | .049 |
Result: Since p < 0.05 across most variables, null hypothesis H01 is REJECTED. A statistically significant difference exists between traditional and blockchain accounting. Blockchain significantly improves efficiency, reduces time, reduces errors, and strengthens security and integrity, though transparency remains questionable.
Table 2: Test Statistics – Auditing Perspective (H02)a,b
a. Kruskal Wallis Test | b. Grouping Variable: 2D TO 3D
| Statistic | AD1 | AD2 | AD3 | AD4 | AD5 |
|---|---|---|---|---|---|
| Chi-Square | 16.359 | 16.989 | 17.189 | 2.384 | 15.652 |
| df | 3 | 3 | 3 | 3 | 3 |
| Asymp. Sig. (p) | .001 | .001 | .001 | .497 | .001 |
Result: Since p < 0.05, null hypothesis H02 is REJECTED. Significant difference observed; blockchain provides superior audit trails and fraud mitigation, though respondents note perceived operational risks remain high.
Table 3: Test Statistics – Financial Reporting Perspective (H03)a,b
a. Kruskal Wallis Test | b. Grouping Variable: 2D TO 3D
| Statistic | FR1 | FR2 | FR3 | FR5 | FR4 |
|---|---|---|---|---|---|
| Chi-Square | 7.613 | 10.164 | 7.923 | 2.828 | 4.802 |
| df | 3 | 3 | 3 | 3 | 3 |
| Asymp. Sig. (p) | .055 | .017 | .048 | .419 | .187 |
Result: Since p > 0.05 in most cases, null hypothesis H03 is ACCEPTED. Blockchain does not show a statistically significant advantage over traditional systems for presenting financial reports to diverse stakeholders, establishing the necessity for a customized 4D reporting framework.
Table 4: Test Statistics – Corporate Governance Perspective (H04)a,b
a. Kruskal Wallis Test | b. Grouping Variable: 2D TO 3D
| Statistic | GV1 | GV2 | GV3 | GV4 | GV5 |
|---|---|---|---|---|---|
| Chi-Square | 10.501 | .358 | .591 | 2.828 | 4.146 |
| df | 3 | 3 | 3 | 3 | 3 |
| Asymp. Sig. (p) | .015 | .949 | .899 | .419 | .246 |
Result: With p > 0.05 across majority indicators, null hypothesis H04 is ACCEPTED. Blockchain’s three-layer structure lacks the necessary standardized governance frameworks, clear guidance, and behavioral flexibility.
Proposed 4-Layer Accounting System: 4-Dimensional Customized Entry & Reporting (2022)
The empirical results prove that while 3-layer blockchain technology is adequate for basic bookkeeping and auditing verification, it falls short in financial reporting and governance. To resolve this, a 4-Dimensional (4D) Customized Entry and Reporting System is evaluated (Sharma A., 2022).
1. Debit
Traditional entry side capturing destination/application of economic resources.
2. Credit
Traditional entry side capturing origin/source of economic obligations.
3. Trebit (Digital Authorization)
Digitalized authorization of the transaction via cryptographic digital signatures ensuring immutable provenance.
4. Foreit (Customized Reporting)
Auto-generated customized reporting and stakeholder communication structured dynamically based on user role and regulatory needs.
“The system will work beyond the traditional accounting system of debit and credit recording of the transaction. Trebit is digitalised authorisation of the transaction. And foreit is relating to auto generated customized reporting system and communication on the basis of nature and role of the stakeholders”
Conclusion
The complexity of transaction recording has been increasing day by day in the time of changing scenarios and disruptive technologies era. Blockchain technology has to be one of the biggest innovations of the era of industry 4.0. Blockchain’s implementation makes the presentation of financial statements and reporting a significant manner.
Blockchain technology is going to become a need of the era to maintain the accounting system. It can be concluded that Blockchain technology is more efficient in comparison to traditional accounting systems adopted in a firm from an accounting and auditing perspective but it is not found a significant technique to present financial reporting and to maintain corporate governance. Due to the unsuitability of the three-layer-based blockchain technology, there is a need to improve the accounting and reporting system.
It is suggested that new innovative four-fold customized accounting can be applied to manage and present proper financial reporting purposes. It will prove better and more efficient in financial reporting and corporate governance area, where the present model of blockchain technology does not seem much suitable. It will help in creating transparency among all the stakeholders. This technique will take care of the requirement of recording as per standard and also fulfilling the customized need of stakeholders.