Text

theses

ETD doctoral

Technological advances in the assurance profession aim to improve the efficiency and effectiveness of government reporting. One such technology is blockchain, which documents transactions in units of blocks, thus providing transparency and enabling smart audits. This dissertation will demonstrate how government agencies and auditors can employ blockchain and smart contracts to enhance open government and auditing procedures. Specifically, the focus of the dissertation and its contribution will be on applications of advanced technological tools to develop blockchain-based smart contracts in open government, enable greater transparency in government reporting, and enhance government auditing.

The first essay develops a conceptual model that demonstrates how blockchain’s application to government financial and nonfinancial records can present stakeholders with a higher level of transparency. Numerous studies in the accounting and auditing literature have proposed and implemented this technology, emphasizing its potential to remodel the business environment (Abreu, Aparicio, & Costa, 2018; Dai, He, & Yu, 2019; Dai & Vasarhelyi, 2017; Kaaniche & Laurent, 2017; O’Leary, 2017; Rozario & Thomas, 2019; Rozario & Vasarhelyi, 2018; Schmitz & Leoni, 2019). However, as the extant research has focused mainly on the private sector, it is crucial for governmental accounting not to lag behind the private sector (Lapsley & Wright, 2004). Therefore, many studies have attempted to address how to enhance transparency in a formalized way (Criado, Sandoval-Almazan, & Gil-Garcia, 2013; Harrison, Pardo, & Cook, 2012; Kassen, 2013). In recent years, massive changes to the government reporting requirements have taken place, reflecting the government’s recognition of the need for a more open evidence-based practice. Government agencies currently use qualitative methods to complete the reporting process; however, this is far from an objectively efficient method to allow for effective public oversight. The open government’s objective is to have systems that include unrestricted access to their records, procedures, and data for public review and engagement. Also, this paper’s a conceptual model has the potential to aid automating the government’s budgeting, financial reporting, and planning. The conceptual model was tested, and the results compared to the current US government agencies’ open data practice. The results demonstrate that blockchain's application to financial and non-financial data can provide stakeholders with a higher level of transparency in government reporting.

The second essay develops a methodology whereby blockchain-based smart contracts can be implemented as a decentralized system that systematically documents financial and nonfinancial events between many parties in a provable and robust process. With a large number of transactions associated with government contracts being executed daily and a limited audit capacity, government auditors are seeking more automated approaches to detect and investigate anomalies and exceptions. The proposed methodology can enable real-time compliance auditing through integrated data. This paper proposes a conceptual model that processes government contracts into smart contracts to conduct state governmental agencies’ compliance audits in real-time. For example, after the agency receives requested goods, the smart contract confirms whether the receipt of goods complies with the conditions specified in the purchase order.

The main contributions of this dissertation are as follows. First, it is one of the few research studies that explain blockchain technology and smart contracts applications in the government reporting domain to meet open government objectives. The second contribution is to compare the currently available blockchain technologies and smart contract applications. The third contribution is determining which of these blockchain technologies is the most suitable for use in the government sector. Fourth, this dissertation develops conceptual models to generate better transparency and robotize government compliance audits in governmental accounting and the auditing literature. Finally, it demonstrates the process of testing the proposed methods using the most relevant blockchain and smart contracts in the government sector.

ETD_11402

Ph.D.

Includes bibliographical references

doi:10.7282/t3-wsdh-az09

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