Triple-Entry Accounting Using Blockchain

Abstract

The objective of this research is to investigate Triple Entry Accounting (TEA), an evolution from the traditional double entry bookkeeping. To start, the traditional double entry system provides internal consistency but is subject to information asymmetry, reconciliation challenges, and human fraud. This research aims to investigate whether a "single source of truth" for inter-corporate transactions can be achieved by utilizing a third entry in a blockchain system. The methodology used is a simulation created in Microsoft Excel. The research looks into the various advantages of the application of Triple-Entry Accounting. The research results show that a Triple-Entry system provides a 100% detection capability for quantitative discrepancies, reducing the "time to detection" from weeks to seconds. Additionally, the research demonstrates how AI can be used as a complementary tool to assist with continuous assurance. The research concludes that the move to a Triple-Entry system is not merely a technical evolution, but a shift to a system of "financial transparency" and "proof of solvency." With the elimination of the need for retrospective reconciliation, Triple-Entry Accounting opens the door to a dynamic reporting environment that will increase the integrity of global financial markets.