Authors: Dr. Rajidi Rammohan Reddy
Abstract: Financial scandals and the challenge of information asymmetries in corporate governance systems have revealed severe inadequacies in the existing systems of financial reporting and audits. Being inherently decentralized, immutable, and programmable, blockchain technology brings transformative capabilities to improve financial transparency and auditability in these systems. In this paper, we conduct a detailed study on how blockchain can be applied for financial transparency through a conceptual model that leverages three innovative features, such as triple entry accounting, automated compliance using smart contracts, and real time continuous auditing. We suggest a combination of permissioned blockchain architecture and cloud computing techniques to deal with scalability and regulatory issues that arise when applying blockchain in financial governance. Through our quantitative analysis, we show significant gains in the performance measures that include 88% decrease in audit delay time, 94% drop in data manipulation events, and 76% improvement in stakeholder trust index.
DOI: http://doi.org/10.5281/zenodo.22768600
