Blockchain-Based Accounting Transparency and Audit Quality: The Mediating Role of Transaction Traceability
DOI:
https://doi.org/10.70568/ijdafs.3.1.4Keywords:
Blockchain, Accounting transparency, Transaction traceability, Audit quality, PLS-SEM, JordanAbstract
The blockchain technology is expected to change the way in which the accounting transactions are recorded and verified, however, the transparency of the blockchain alone does not guarantee a better audit. Accordingly, the current study examines the effect of the blockchain-based accounting transparency on the audit quality, and it examines the mediating role of the transaction traceability in this relationship, based on the agency theory. A quantitative, cross-sectional survey design was adopted, and the data were collected from 316 accountants, internal auditors, external auditors, and financial managers in Jordan who have a direct involvement with the blockchain applications. The data were analyzed by using the partial least squares structural equation modelling (PLS-SEM) in SmartPLS 4. The results showed that the measurement model is reliable and valid. Moreover, the blockchain-based accounting transparency has a positive and significant effect on the transaction traceability (β = 0.678, p < .001), and the transaction traceability has a positive and significant effect on the audit quality (β = 0.604, p < .001). Furthermore, the transaction traceability mediates the relationship between the blockchain-based accounting transparency and the audit quality (indirect effect = 0.409, 95% CI 0.346, 0.472). The model explains 45.9% of the variance in the transaction traceability and 36.5% of the variance in the audit quality, and the model has a predictive relevance for the both constructs. Based on these results, the benefit of the blockchain for the audit depends on the ability of the auditors to trace the transactions, and therefore the audit firms, the organizations that adopt the blockchain, and the regulators in Jordan should give a special attention to the traceability features of the blockchain systems.
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