Computers and backdating
Smart contracts can securely operate on a blockchain; any party can perform verification of transactions in compliance with the embedded rules.
More importantly, blockchain users can program their own rules into a smart contract to execute specific tasks.
Because blockchain keeps the record of an asset transfer, any type of misappropriation can be detected by tracing through the blockchain.
The transparency of blockchain will make it easy for forensic accountants to access and examine the material related-party transactions (Dai and Vasarhelyi 2017).To avoid a single point of failure, the transaction verification process is controlled by all the computers, rather than managed centrally.The computers jointly supervise system operation and prevent the information in the ledger from being tampered with.Vasarhelyi, “Towards Blockchain-based Accounting and Assurance,” forthcoming, 2017).The second generation of blockchain moved towards a new type of application called a “smart contract.” Smart contracts are defined as “user-defined programs that specify rules-governing transactions” (Kevin Delmolino, Mitchell Arnett, Ahmed Kosba, Andrew Miller, and Elaine Shi, “Step by Step towards Creating a Safe Smart Contract,” Nov. For example, a person’s last will and testament could be encoded as a smart contract so that the inheritance could be automatically bequeathed to recipients if predetermined conditions (e.g., the death of the donor or a specific point in time) are reached (Melanie Swan, O’Reilly Media, 2015).