Does blockchain enhance financial reporting quality?

Although blockchain is an innovative and disruptive technology, it has already been adopted in accounting by some firms. However, as the current state of blockchain incorporation into financial reporting systems and its effects on firms’ financial reporting quality (FRQ) are still unknown, this gap in the literature is addressed in the current study. The obtained results show that blockchain-adopting firms have a lower incidence of material weaknesses in internal control over financial reporting, as well as issue fewer restatements and are less prone to reporting lags. Furthermore, the benefits generated from blockchain adoption are more pronounced for firms that adopt blockchain with IT expertise in their management teams. Overall, the evidence presented in this work suggests that blockchain adoption has a positive impact on FRQ.