A proposed Framework for Integrating XBRL and Blockchain to Improve Financial Reporting Transparency and Integrity: XBRL Chain

Abstract

The research aims to use the blockchain technology to ensure thedistribution of XBRL content to a decentralized peer- to-peer networkwhile maintaining the authority of the government toward the wholedata. The topic of combination XBRL and blockchain is scarcelydiscussed in academic journal due to the very early stage of technologydevelopment. This paper explains how to build a distributed ledgerplatform prototype that designed to improve financial reportstransparency and integrity by using blockchain technology in line withXBRL to form XBRL chain. XBRL chain helps in developing smartcontracts that more business rules encoded in software, why are as goodas the person or team devising the rules and the developer turning thoserules into code. These smart contracts with newest encoded accountingrules could effectively control the recording of accounting activities.Therefore, these contracts would provide automatic assurance onprocesses, such as posting, classification and cutoff.The proposed framework of XBRL chain makes the quality ofinformation in the financial reporting more interoperability andcomparability. This framework should subject to six situationalconditions are: multi party, trusted authority, decentralization, smartcontract, data confusability, and type of blockchain. This papercontributes to the literature by expending upon emerging concerns andproviding opportunities for future research.