Smart ledger: The blockchain‐based accounting information recording protocol
Yuqian Zhang, Saeid Pourroostaei Ardakani, Wenqi Han
Abstract
Abstract Blockchain technology has the potential to reduce transaction errors and enhance the quality of reporting significantly. This article proposes a conceptual blockchain‐based protocol, labelled Smart Ledger, as a replacement for the traditional accounting information recording system. A smart ledger is a computerized algorithm that utilizes blockchain technology to perform accounting ledger functions. Its validity is based on two mechanisms within the blockchain architecture: Fractional Accounting Transactions (FAT) and Hierarchical Accounting Transaction Execution (HATE). As such, the smart ledger is a hybrid protocol that combines accounting information recording principles with the immutability of blockchain technology. If widely implemented, it could have a significant impact on accounting practices and the accounting profession.