Blockchain Adoption and Audit Quality
Prof. Shuangchen YU
Assistant Professor in Accounting
FBA, UM
Date: 24 February 2025 (Monday)
Time: 13:00-14:00
Venue: FBA Lobby
Abstract
This study examines the impact of blockchain adoption in the corporate setting. Specifically, we provide comprehensive empirical support to recent theory (Cao, Cong, and Young, 2024) proposing that blockchain adoption positively affects endogenous audit quality and client misstatements. Exploiting the exogenous implementation of blockchain technology in bank confirmations in China, our study documents a significant reduction in regulatory penalties for financial misstatements, driven by auditors’ enhanced ability to identify and correct financial errors, especially in revenue and expense recognition. Additionally, we find that the benefits of blockchain adoption are more pronounced in non-specialist industries, firms with audit firms not rotated, and firms with smaller audit committees or fewer independent directors and apply regardless of whether a large auditor audits the firm and whether the enterprises are state-owned, suggesting that blockchain adoption also levels the plain field of audit quality across auditors with different capacities and financial resources. Moreover, blockchain adoption induces efficiency, translating to lower audit fees, higher non-audit service fees, reduced audit costs, and more timely audit reporting. Overall, this study provides a novel contribution to the literature examining the economic consequences of emerging technologies in auditing, tests several predictions of recently proposed theory, and offers insights into potential applications and future directions of blockchain in the corporate setting.
Speaker
Shuangchen Yu holds a PhD in Management (Accounting), dual bachelor’s degrees (Bachelor in Economics and Arts) from Tsinghua University. Before joining UM, she was a visiting PhD Student at Yale University from 2022 to 2023, additionally, she served as Teaching Assistant for Schwarzman Scholars program from 2019 to 2022 and for Department of Accounting from 2019 to 2024 at Tsinghua University respectively. Prof. YU’s research interests include Blockchain and Cryptocurrency, and Financial Accounting and Capital Market. Prof. YU published a paper in Review of Accounting Studies (ABS4) and has several other working papers.
All are welcome!
