Degree Project in Business Administration Title : Blockchain in audit trails – an investigation of how blockchain can help auditors to implement audit trails

Background: Blockchain have attracted a lot of attention in the last few years. It has been described as a technology that will increase the effectiveness of monitoring and improve the auditability of transactions which would have great implications for accountants and auditors. Purpose: The purpose of this study is to investigate how blockchain can help auditors to implement audit trails. The aim is to increase awareness about what the blockchain technology is, investigate if blockchain can be used in audit trails and if it can contribute to more cost-effective, reliable and secure audit trail. Methodology: The study is an exploratory research to increase the knowledge and understanding of blockchain and audit trails. It has a qualitative approach where primary data is collected from a semi-structured interview with Deloitte. Conclusion: The results indicates that there exists a gap in the literature of previously research on blockchain in relation to audit trails that needs further investigation. Furthermore, this study shows that blockchain is a technology with a lot of potential, but knowledge is still limited. This study concludes that there is too little research conducted to be able to provide any conclusive evidence. Due to findings and limitations of this research, suggestions for further research is provided. Explanation of key terms In order to facilitate the reading, a number of concepts related to the subject of the study will be presented below. Journal entry: Used to record a business transaction in the accounting records of a business. Audit trail: A paper or electronic trail that gives a step by step documented history of a transaction. Blockchain: A distributed ledger which store digital information in a chain of blocks. Storage of this distributed data creates reliability and security of the information, allowing it to function without a central unit. Distributed network: A type of computer network that is spread over different network, provides a single data communication network which can be managed jointly or separately by each network. Node: A computer connected to the blockchain network. Hash: A function that converts input of letters and numbers into an encrypted output of a fixed length. Mining: The process by which transactions are verified and added to the public ledger, known as the blockchain. Miners: The ones validating new transactions and record them to the public ledger, the blockchain. Cryptocurrency: A digital or virtual currency that uses cryptography for security. Bitcoin: A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. Bitcoin transactions are stored in the distributed network – the blockchain. Smart contracts: Self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of codes, the code and the agreements exist on the blockchain network. 1. TABLE OF CONTENTS