Lucian Trestioreanu, Wazen M. Shbair, Flaviene Scheidt de Cristo, Radu State
Recent technologies such as inter-ledger payments, non-fungible tokens, and smart contracts are all fruited from the ongoing development of Distributed Ledger Technologies. The foreseen trend is that they will play an increasingly visible role in daily life, which will have to be backed by appropriate operational resources. For example, due to increasing demand, smart contracts could soon face a shortage of knowledgeable users and tools to handle them in practice. Widespread smart contract adoption is currently limited by security, usability and costs aspects. Because of a steep learning curve, the handling of smart contracts is currently performed by specialised developers mainly, and most of the research effort is focusing on smart contract security, while other aspects like usability being somewhat neglected. Specific tools would lower the entry barrier, enabling interested non-experts to create smart contracts. In this paper we designed, developed and tested Blockly2Hooks, a solution towards filling this gap even in challenging scenarios such as when the smart contracts are written in an advanced language like C. With the XRP Ledger as a concrete working case, Blockly2Hooks helps interested non-experts from the community to learn smart contracts easily and adopt the technology, through leveraging well-proven teaching methodologies like Visual Programming Languages, and more specifically, the Blockly Visual Programming library from Google. The platform was developed and tested and the results are promising to make learning smart contract development smoother.
Internal Auditing (IA) as a profession has reshaped over decades in order to adapt to the constantly changing environment surrounding it. Internal auditors are ongoingly confronted with new technologies and need to be aware of complex digital risks, new fraud schemes, but also hot topics like Internet of Things, Artificial Intelligence and Blockchain. For blockchain a lot of the spotlight was historically on the investment and capitalization aspects of cryptocurrencies whereas the technology itself has evolved from a mere means of payment and value storage to more complex business constructs managed by self-enforcing smart contracts and oracles. In this dissertation the established and internationally recognized standards of internal auditing are applied to the context of newly popping up blockchain-based Decentralized Autonomous Organizations (DAOs) that operate on a series of smart contracts. The tokenized nature of ownership of these distributed ledgers as well as some law experts' assessments imply that they may have to be classified as public capital corporations and therefore be subjected to stricter rules and standards. Not only are internal audit functions highly recommended for large organizations but depending on the corporate laws of a country and the industry they are likely to be mandatory. While DAO-enthusiasts imply that the immutable nature of the blockchain, the recognized consensus mechanism, and strong preventive and automated controls will make internal auditing obsolete, this research sheds light on whether there are conceptual obstacles for IA in DAOs regarding compliance with internationally recognized internal auditing standards and therefore question the overall legality of this type of organization. After an initial analysis of professional and scientific publications as a basis, each IA standard is reviewed for obstacles, benefits, and challenges regarding the respective compliance in a DAO context utilizing an exploratory research method. Because it appears that there may be governance and operational collisions with regard to the strict standards of the Institute of Internal Auditors on the one hand and the conceptual unique setup of blockchain-based DAOs on the other, we evaluate the hypothesis by which standard compliance is impossible and therefore the legality of a DAO in itself may be in question. In addition, we analyze whether and how the use of a DAO can benefit and/or complicate the compliance with each internal auditing standard. This foundational research dissertation may offer guidance on what safeguards DAOs need to implement to comply with certain laws and standards but also addresses policy and standard makers with the assignment to update their rules and offer guidance for implementation. The dissertation may also offer guidance for the mandatory external and internal quality assessments (IIA Standards 1311 and 1312) of internal audit functions in DAOs. Overall, it presents additional insights to related professions like accountants, compliance officers, external auditors, anti-fraud professionals, IT auditors and others while offering a glimpse into what the role of an internal auditor of the future might realistically look like.
Abstract: This research aims to examine the current practices of accounting for bitcoins by reviewing some studies which related to this topic, and thus for achieving the main objective of the study, which is to develop a proposed model to account for bitcoins that unifies accounting practices of bitcoins. The main objective of the study is to develop a proposed model to account for bitcoins that unifies accounting practices of bitcoins. To achieve this objective, the researchers divided the research to include the following: “Introduction” which aimed to gain a holistic view for the research, and then " Literature Review." In this part the researchers clarify the nature, characteristics, pros and cons, and also how the bitcoin system works, through reviewing number of papers, accounting academic journals, professional publications. After that, the researchers reviewed the different current accounting practices for bitcoins, and the efforts of some formal organizations in accounting for bitcoins.Finally, the researchers introduced A proposed framework for unifying the accounting practices for bitcoins; the proposed framework consisted of five main pillars, recognition and classification of bitcoins, measurement of bitcoins and disclosures for bitcoins. The researchers represented a case of financial statements to apply the proposed framework for accounting for bitcoins, and show the effect of the proposed accounting model on the financial statements.
This study examines the value of System and Organization Controls 2 (SOC 2) audits to customers. A SOC 2 audit is a voluntary assurance service provided by an independent CPA over a firm's internal controls relevant to information system security. I use cryptocurrency exchanges, a setting where the lack of customer trust can be particularly acute, to examine whether SOC 2 audits increase customer demand. I find a substantial increase in liquidity following the disclosure of initial SOC 2 audit completion: the trading volume of cryptocurrencies listed on audited exchanges increases by more than 60 percent, and the price impact decreases by approximately 40 percent in the three months after SOC 2 audit disclosure. Exploring the channels through which SOC 2 audits provide value to customers, I find that exchanges with high-quality security measures are more likely to initiate SOC 2 audits, and that continued audits ensure that the quality of security measures remains high. Overall, this study provides novel evidence that SOC 2 audits provide value to customers by sending a credible and positive signal of exchange security, and thus significantly increase customer demand.
Adnotacja.Nowe cyfrowe formy pieniędzy mogą umożliwić tańsze i szybsze płatności, zwiększyć dostępność finansową, zwiększyć odporność i konkurencję wśród dostawców usług płatniczych oraz ułatwić przelewy transgraniczne.W tym celu należy podjąć trudne decyzje polityczne: wyjaśnić role sektora publicznego i prywatnego w zapewnianiu bezpieczeństwa i regulowaniu cyfrowych form pieniądza.Cel badania: ewolucyjny wybór banków centralnych do digitalizacji swoich walut fiducjarnych na tle rozwoju aktywów kryptograficznych.Cel artykułu określa metody badawcze: stosowane są ogólne naukowe metody badawcze i specjalnie prawne metody poznania.Co ogólnie pozwoliło na wyciągnięcie właściwych wniosków.Zrównoważone podejście do wywrotowych technologii FinTech polega na wyeliminowaniu ich szkodliwych skutków
В ходе исследования проведен анализ рынка криптовалют для выбора более актуальной монеты с большой капитализацией. Благодаря своей набирающей популярности для исследования была выбрана криптовалюта ETH. Литературный обзор подтвердил актуальность и показал невысокий уровень изученности этой криптовалюты в рамках темы. Рассмотрены значения ряда за период с 14.03.2020 по 30.06.2020. Проведены тесты стационарности с помощью анализа графиков АКФ и ЧАКФ выбранного ряда криптовалюты, а также расширенные тесты Дики-Фуллера. Преобразованы исходные данные для уменьшения разброса дисперсии (логарифмирование) и исключение сезонности и тренда (взятие второй разности). Выполнено построение моделей прогноза с помощью модели авторегрессии — проинтегрированного скользящего среднего ARIMA (p, d, q) и с помощью статистических методов (анализ обычного и скорректированного коэффициентов детерминации) и информационных критериев Акайке и Швардца была выбрана единственная подходящая модель. Для того, чтобы можно было прогнозировать значения, была проведена диагностика модели по трем параметрам (остатки белый шум; модель стационарна и обратима) с помощью анализа остатков и теста единичного корня, и после получения успешного результата, спрогнозированы 2 значения за период с 01.07.2020 по 02.07.2020. Сравнение реальных и прогнозных значений цены криптовалюты показало, что сумма квадратов отклонений существенно ниже от выбранной точности результатов. Визуальный анализ графика также показал: модель способна формировать пики и спады цены. Был сделан вывод об эффективности данного метода в краткосрочных прогнозах криптовалюты. The study conducts an analysis of the cryptocurrency market to select a more relevant coin with a large capitalization. Due to its gaining popularity, the cryptocurrency ETH was chosen for the study. Literature review confirms the relevance and shows a low level of study of this cryptocurrency within the topic. The values of the series for the period from 14.03.2020 to 30.06.2020 are considered. The stationarity tests with the analysis of ACF and ChakF charts of the selected cryptocurrency series, as well as the extended Dickey-Fuller tests are carried out. The initial data were transformed to reduce dispersion (logarithm) and to exclude seasonality and trend (taking the second difference). Forecasting models were built by means of autoregressive model — ARIMA (p, d, q) integrated moving average and by means of statistical methods (analysis of ordinary and adjusted coefficients of determination) and Akaike and Schwartz information criteria the only appropriate model was selected. In order to be able to predict values, the model was diagnosed by three parameters (residuals white noise; the model is stationary and reversible) using residuals analysis and unit root test, and after obtaining a successful result, 2 values were predicted for the period from 01.07.2020 to 02.07.2020. A comparison of the real and predicted cryptocurrency price values shows that the sum of squares of deviation is significantly lower than the selected accuracy of the results. Visual analysis of the chart also shows that the model is able to form price peaks and declines. It is concluded that this method is effective in short-term cryptocurrency forecasts.
Cristóbal Marinkovic, Julio López Fenner, Óscar Ancán, Carlos Cares
A smart contract is an agreement whose execution is automated or semi-automated. DasContract was introduced in 2019-2021 as a domain-specific language for smart-contract modeling, with the ability to generate code in a programming language. DasContract’s former modeling environment had various limitations, both technical and design related. Some of these limitations have previously been recognized in the literature in several dimensions. In this study, we propose further guidelines for contract modeling to address error prevention in the modeling environment, thus contributing to improved smart-contract specifications.
Abstract Higher regulatory compliance requirements, fast and continuous changes in regulations and high digital dynamics in the financial markets are powering RegTech (regulatory technology), defined as technology‐enabled innovation applied to the world of regulation, compliance, risk management, reporting and supervision. This work builds on a systematic literature review and a bibliometric analysis of the literature on RegTech, its influential papers and authors, its main areas of research, its past and its future. The resulting multi-dimensional framework bridges across four main dimensions, starting with regulation and technology, where one or more regulations, not necessarily financial ones, are addressed with the support of technologies (e.g. artificial intelligence, DLT, blockchain, smart contracts, API). Data play a central role, as sharing them enables data ecosystems, where additional value can be attained by each market participant, while data automation and machine-readable regulations empower regulators to pull data directly from the banks’ systems and combine these data with data obtained directly from customers or other external sources. Several applications emerge, both for regulated entities, covering matters of compliance, monitoring, risk management, reporting and operations, as well as for authorities, which can leverage on RegTech (SupTech) solutions to make policies, to undertake their authorising, supervising and enforcement operations, for monitoring and controlling purposes, and even to issue fines automatically. As a consequence, stakeholders can reap a series of benefits, such as higher efficiency and effectiveness, accuracy, transparency and lower compliance costs but also risks, such as cyber risk, algorithmic biases, and dehumanization.
YASH RAJPUT, Chaitanya Kale -, Santosh Kumar -, Asam Bhanu Prakash - · 5 authors
Know Your Customer (KYC) verification is an essential regulatory procedure in financial services to prevent fraud, money laundering and other financial crimes. Conventional approaches are centralized, redundant across institutions, and prone to data breaches. This paper presents a decentralized framework that combines blockchain smart contracts and InterPlanetary File System (IPFS) for immutably recording KYC document fingerprints while storing actual documents off-chain. We describe the system architecture, implementation choices, security and privacy considerations, and evaluation metrics. The paper includes a comparison between traditional and blockchainenabled KYC systems and discusses future directions such as Decentralized Identifiers (DIDs) and Zero-Knowledge Proofs(ZKPs).
With the birth of Bitcoin to the maturity of development, blockchain has been sought after by various industries, and the application research around blockchain technology has developed rapidly. Blockchain has excellent characteristics such as decentralization, openness, independence, security, and anonymity. Applying the characteristics, types and core technologies of blockchain technology to the management model and management methods of the accounting industry will definitely have an important impact on the development and innovation of the accounting industry. By analyzing and discussing the impact of blockchain technology on the informatization construction, data security, fund settlement, financial audit and other aspects of the accounting industry, it is expected that mature blockchain technology will be applied to the accounting industry, which will definitely help the steady development of the accounting industry and promote the virtuous circle and development of the entire accounting industry.
The research aims to use the blockchain technology to ensure the distribution of XBRL content to a decentralized peer- to-peer network while maintaining the authority of the government toward the whole data. The topic of combination XBRL and blockchain is scarcely discussed in academic journal due to the very early stage of technology development. This paper explains how to build a distributed ledger platform prototype that designed to improve financial reports transparency and integrity by using blockchain technology in line with XBRL to form XBRL chain. XBRL chain helps in developing smart contracts that more business rules encoded in software, why are as good as the person or team devising the rules and the developer turning those rules into code. These smart contracts with newest encoded accounting rules could effectively control the recording of accounting activities. Therefore, these contracts would provide automatic assurance on processes, such as posting, classification and cutoff.
The proposed framework of XBRL chain makes the quality of information in the financial reporting more interoperability and comparability. This framework should subject to six situational conditions are: multi party, trusted authority, decentralization, smart contract, data confusability, and type of blockchain. A case study is implemented on Egyptian company (EDITA ) Food Company that publishes its financial statements under IFRS. The case explained how the integration between XBRL and blockchain can be built to implement XBRL mapping for consolidated balance sheet and profit or loss statement the mapping process is implemented under using black chain software. Also, the percentage of fit between IFRS taxonomy 2020 and Egyptian financial practices are measured. The findings of the case study revealed that, for EDITA Food Company, 89 percent of the elements in the two basic financial statements exist in the taxonomy. The high degree of misfit is found in the balance sheet statement 14 percent and in income statement is 6 percent limitations and future research directions are, this paper contributes to the literature by expending upon emerging concerns and providing opportunities for future research.
SUMMARY The novelty, ambiguity, and the lack of official guidance surrounding cryptocurrency transactions impose additional audit risks that should be considered during client acceptance and retention and planning audit procedures. We develop a four-quadrant model to assist auditors in client acceptance and continuance decisions and identify cryptocurrency risks that should be considered during audit planning and audit evidence gathering.
Chelsea M. Anderson, Vivian W. Fang, James Moon, Jonathan E. Shipman
ABSTRACT This paper explores U.S. public firms’ cryptocurrency holdings and accounting practices from 2013 to 2022 against the backdrop of the recently enacted crypto accounting rule, ASU 2023‐08. Descriptive analyses suggest exponential growth in corporate crypto holdings and significant variation in crypto accounting practices, underscoring the rule's necessity. Hypothesis tests using the pre‐rule data reveal three insights with direct relevance to the rule. First, firms appear to view crypto assets more akin to investments than intangible assets, consistent with the rule's mandate of the fair value model. Second, Big 4 auditors steer firms toward the impairment model and less detailed presentation choices. This conservative approach is unlikely to meet the new rule's goal of providing the most decision‐useful information. Third, increased liquidity of crypto markets prompts the use of the fair value model and a more detailed presentation, consistent with the rule's focus on more actively traded tokens. However, within our sample, we find some evidence consistent with fair value reporting increasing stock return volatility and no evidence that it enhances earnings informativeness.
Mehmet Cihangir, Eray Baysa, Fahrettin Söker, Sevim Ezgi Eroğlu
Araştırmadaüniversite öğrencilerinin, mevcutteknolojisiyle birlikte yeni bir para birimi olarak gündeme gelenBitcoin piyasasına katılım eğilimlerinin ortaya konması ve buna yönelik bir ölçek geliştirilmesi amaçlanmıştır. Buamaçla Cumhuriyet Üniversitesi, Gaziosmanpaşa Üniversitesi, Kahramanmaraş Sütçüİmam Üniversitesi ve Osmaniye Korkut Ata Üniversitesi öğrencilerine bir anketuygulanmıştır. Araştırmanın örneklemi seçilirken özellikle İktisadi ve İdariBilimler Fakültesi öğrencileri ile Bitcoinle daha alakalı olabileceği düşünülenbazı mühendislik fakültelerinden öğrenciler seçilmiştir. Çalışmada örneklembüyüklüğü ana kütleyi yeterince temsil eder büyüklüktedir. Söz konusuörneklemden elde edilen verilerin analizi aşamasında SPSS 21.0 paket programıkullanılarak katılımcıların frekans ve yüzde değerleri hesaplanmış, ölçeklereilişkin geçerlilik ve güvenirlik analizi yapılmış, ölçekler arasında ilişkinintespitinde ise korelasyon analizinden yararlanılmıştır. Araştırma sonuçlarınagöre, üniversite öğrencilerinin Bitcoin hakkında yeterli bilgiye sahipolmadıkları ancak güncelliği nedeniyle büyük ölçüde ilgilerini çektiği ve işlemyapmaya hazır göründükleri gözlemlenmiştir.
This paper revolves around the evolving policies of India regarding cryptocurrencies and blockchain technology are extensively analyzed in this study with an objective to establish a dynamic and sustainable regime.India currently follows an observational or wait-and-watch approach instead of an active regulatory role, as per a review of government statements, legislative measures1, and infrastructure initiatives. The thesis focuses specifically on the taxation of crypto-assets in the Indian scenario. It examines critically the current tax provisions under the Income Tax Act and the Finance Act, 2022,where cryptocurrencies have been categorized as Virtual Digital Assets (VDAs)2, thus making them subject to special taxation and reporting requirements. The research assesses how these provisions relate to wider regulatory and economic goals, including investor protection, financial stability, and technological advancement. This study suggests a two-character regulatory framework for cryptocurrencies depending on their function and usage. This purpose-based, time-bound categorization aims to offer clarity and adaptability so that policymakerscan modify rules for the changing applications of digital assets.
With the rise of Bitcoin, the blockchain technology as its core technology has received wide attention from all walks of life. Blockchain technology demonstrates its potential for audit applications by virtue of decentralization, transparency, and data tampering. This paper starts from the characteristics of blockchain technology and discusses the application value of blockchain in audit. Through the comparative study on the blockchain audit application of the international "big four" firms and Chinese firms, the impact of blockchain audit on the firm's business and the working methods of auditors is discussed. Based on this, relevant suggestions are put forward for the future development of blockchain audit.
Günlük yaşama çok hızlı bir giriş yapan kripto para birimleri bireyin hayatını çevrelemeye başlamıştır. Muhasebe bilimi açısından konuya bakıldığında incelenmesi gereken finansal açıdan hayati derecede önemli yeni durumlar ortaya çıkmıştır. Bunlara kripto para birimlerinin muhasebeleştirilmesi, meydana gelen kazancın vergilendirilmesi, işletmelerin bünyelerinde bulunan kripto paraların ve bu paralarla yapılan işlemlerin denetim açısından durumu sayılabilir. Bu çalışmada kripto para birimlerinin muhasebe açısından incelenerek muhasebeleştirilmesi, vergiye konu edilmesi ve denetim açısından durumunun irdelenmesi ve çeşitli önerilerde bulunulması amaçlanmaktadır.
Son günlerde ekonomi gündeminde oldukça fazla yer kaplayan Bitcoin faaliyetleri, bazı ülke- ler tarafından yasal olarak kabul edilmekte iken, Türkiye’de ise Bitcoin için tam olarak yasal bir zemin oluşturulamamıştır. Bitcoin’nin en önem- li özelliği ise, vergi cennetleri gibi kapalı bir kutu olması sebebiyle yapılan işlem miktarının belir- lenememesidir. Özellikle son günlerde Bitcoin’in oldukça değer kazanması ve Bitcoin’le yapılan iş- lemlerin kayıt altına alınamaması dolayısıyla mali kontrollerden kaçılabilmesi yatırımcılar açısından Bitcoin’i daha da değerli kılmıştır. Ayrıca Bitco- in’lerin belirli bir sayı ile sınırlı oluşu bu sanal para- yı (kripto parayı) enflasyonun etkilerinden de uzak tutmakta ve gelişmekte olan ülkelerin yerel para birimlerinin Bitcoin karşısında daha az istikrarlı ve finansal krizlere karşı dayanaksız oluşu Bitcoin’i oldukça cazip bir alternatif haline getirmiştir. Bir- çok ekonomist tarafından güven vermeyen bir yatırım ya da ödeme aracı olarak tanımlanan Bit- coin, sadece 2017 yılı içerisinde yüzde 1.700 değer kazanması sebebiyle bu söylemlerin aksine işlem hacmini gün geçtikçe katlamayı başarmıştır. Bun- dan dolayı birçok dünya ülkesi Bitcoin’i yasal bir işlem olarak kabul etme yolunu tercih etmiştir. Böylece yapılan işlemlerin kayıt altına alınabilecek olması Bitcoin ile yapılan işlemler üzerinden de vergi alınabileceği hususunu gündeme getirmiştir. Bu çalışmada, Bitcoin’in tanımına ve gelişimine, özellikleri ve işleyişine, avantaj ve dezavantajla- rına, Türkiye özelinde Bitcoin işlemlerinin vergiye tabi tutulması durumunda hangi gelir unsuru ola- rak kabul edileceği, ne şekilde vergilendirileceği ve muhasebeleştirileceğine ilişkin önerilere yer verilecektir.