The Utilization of Blockchain Technology on Remote Audit to Ensure Audit Data Integrity in Detecting Potential Fraudulent Financial Reporting
Bambang Leo Handoko, Firda Arfianti, Sherly Marlinda · 2022
The rapid evolution of technology has massively changed and shaped audit work culture. At the same time, the COVID-19 pandemic outbreak significantly changed audit and control activities, encouraging auditors to audit clients remotely and forcing auditors to adopt advanced digital technology, especially blockchain-based technology. Blockchain is one decentralized, transparent, and immutable technology that plays an essential role and has an aggressive impact in the audit field. The implementation and adoption of cognitive technologies such as blockchain in the remote audit process allow auditors to access various client data and information in real-time, ensure audit data integrity, review and process data documentation quickly, obtaining data directly without third parties that make it easier for auditors to obtain audit evidence instantly and accurately in detecting any anomalies. This research aims to identify and navigate how blockchain assists auditors in performing remote audits, ensuring data integrity, detecting fraudulent financial reporting, elaborating on factors that influence the auditor's success in using blockchain, and identifying challenges auditors face during blockchain utilization in their remote audits. This research used a descriptive qualitative approach by obtaining primary data from profound interview results with several auditors experienced in using blockchain. We also used secondary data from journals, papers, articles, books, and relevant websites. The research findings showed that blockchain's unique characteristics greatly assist auditors in conducting remote audits, ensuring audit data integrity, and detecting fraudulent financial reporting in various ways. Furthermore, various factors influence blockchain utilization, such as human resources aspects, the effectiveness of the IT control environment, and the CPA size firm. Lastly, auditors should face several challenges in the present and future.