Blockchain Technology and Its Implications for Internal Audits

Abstract

Internal audits have traditionally been mired in a world of physical file storage and labour-intensive documentation. Yet, the advent of blockchain technology signals a seismic shift in this landscape, heralding a move from conventional, reactive methods to a dynamic, ongoing, and proactive audit process. This study explores the transformative potential of blockchain to revolutionize internal audits, offering not merely an examination of its technical aspects within internal auditing (IA) but envisioning a future where internal audits become more streamlined, efficient, and empowering—actively fortifying an organization's financial integrity. Nonetheless, adopting blockchain is not without its challenges. This paper aims to navigate through these potential obstacles, proposing strategies to embrace and surmount them. In addressing these challenges, our research meticulously reviews current practices and the array of existing literature on the subject. Through a comprehensive analysis and synthesis of these sources, we develop a unified framework that underscores our findings. This paper is not just an academic exercise; it's a clarion call to rethink the role and methodology of internal audits in light of emerging digital technologies. Prepare to embark on a journey towards dismantling outdated paper-based systems and welcoming an era marked by digital trust and transparency within the sphere of risk management