Distributed Ledgers, Distributed Institutions?

London School of Economics and Political Science

Accounting, Organisations and Society in cooperation with the Centre for Analysis of Risk & Regulation examine Blockchain Technology

OLD  3.21

OverviewAt the centre of the widespread hype and experimentation, blockchain and distributed ledger technologies hint at, and promise, a new form of social order in which “central” institutions and intermediaries are no longer required for the production of trust between social actors. The existence of duplicate, unchangeable records in distributed virtual accounting books is promised to guarantee accuracy, transparency and ultimately trust among network participants, heralding a fundamental change in the institutional production of trust and the digitization of the logic of the audit trail (Power, 2019). We must ask ourselves: is this real disruption to accounting institutions? Or a transient fashion in security and assurance? And are current theorizations of accounting and regulatory institutions adequate for understanding these developments? The apparent ambition behind blockchain is hardly new. For centuries the production and diffusion of knowledge, the generation and maintenance of trust, and the exercise of power have been linked to, and constituted by, specific technologies of writing which had the codex, i.e. the “book” as we know it, as the core technology of production and diffusion. Yet, it seems clear that the passage from accounting numbers to accounting digits, from written records to digital ones, must surely disrupt the institutions that have guaranteed “trust in numbers” for centuries (e.g. the accounting professions for financial numbers, the State for the census, the science of statistics for population data, and so forth). What is less clear is whether the decentralised ideal that blockchain enthusiasts promote will actually be possible or even desirable.

This workshop is experimental and agenda-building. Accounting matters because of its infrastructural importance for finance and capitalism (Power, 2015) and scholars in other fields are also grappling with the challenges of digitization to forms of order in general, such as private law (Paech, 2017). The workshop intends to address empirical and theoretical questions at the rapidly changing intersection between accounting, institutions and the emergence of blockchain. The following are indicative, but not exhaustive, questions for consideration: 

•	Whether and how blockchain is or might reconfigure ideas of accountability and transparency. What happens to transparency ideals when it is reduced to traceability and to the production of digitized audit trails?
•	How is the distinction between accounting and money changing and evolving?
•	How must existing institutional and performative theories of accounting be adapted, if at all, in the light of blockchain?
•	How has the belief been constructed that blockchain will solve unsolvable problems of transparency and trust? Is this mere fashion or genuinely disruptive for accounting?
•	Will technology exacerbate the loss of meta-narratives identified by Lyotard’s (1984) and therefore intensify what some see as the “democratic deficit” of accounting and accounting standard setting? Or, might blockchain breathe new life into corporate governance and social responsibility, enabling accounting across critical supply chains? 
•	How are technologies like blockchain reconfiguring the institutionalized distinction between “internal” and “external” auditing? What new management control and auditing issues are being generated at the on-block/off block interface?
•	If regulators have “gateways” into, and auditors become nodes of, blockchain networks, how must we rethink concepts of independence and organizational boundaries?
•	How are the accounting profession and the large firms transforming themselves and their services in the face of these changes? For example, will blockchain accelerate management accounting loss of relevance as both discipline and profession, despite its diffusion in practice, or will it provide new opportunities for its diffusion and professional re-legitimation?
•	How are blockchain innovations and applications transforming the production of financial statements, and especially the relationship between transactional data and accounting estimations and valuations?
•	How will accounting standards be written and regulated in a blockchain world? Will coders and programmers acquire de facto institutional power to write accounting law? 
•	If accounting standards diffuse and are powerful because of their malleability, what implications will blockchain have for the persistence of accounting standards as we know them?

The purpose of this workshop is primarily to initiate debate about the implications of the new digital era for the social order of accounting and accountants. We should not be surprised that technology develops before regulation has time to adapt itself, but how can we understand and theorise these actual and potential changes through the lens of institutionalism in ways that, on the one hand, do not overstate the power of social institutions and agencies like accounting standard setters and, on the other hand, do not implicitly adopt a determinist, functionalist view of new technologies?

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Distributed Ledgers, Distributed Institutions?

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