Blockchain and Accounting Fraud Prevention: A Case Study on Luckin Coffee

DOI

10.2991/aebmr.k.220405.009How to use a DOI?

Keywords

blockchain; accounting fraud; fraud triangle; Luckin Coffee

Abstract

Based on the case analysis of recent accounting scandal of Luckin Coffee, the paper studies whether and how the blockchain technology would help to prevent and detect accounting fraud, using the fraud triangle model. I find that the three characteristics of the blockchain technology would help to break the fraud triangle. First, the decentralization (rather than centralized authorization) will largely increase the fraud cost, discouraging fraudulent behavior in financial reporting. Second, the append-only linear form of transactional data (rather than relational database) enhances the tracking of tokenized assets, making the data much more difficult to be modified than the data in a traditional relational database with many data operation possibilities. Third, with smart-contracts serving as automatic controls, the blockchain removes the human factor, thus enhancing the control environment. My findings shed light on how blockchain, as one of the most disruptive and promising emerging technologies, will significantly cause landscape changes in the accounting and auditing fields.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

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TY  - CONF
AU  - Tianhao Chen
PY  - 2022
DA  - 2022/04/29
TI  - Blockchain and Accounting Fraud Prevention: A Case Study on Luckin Coffee
BT  - Proceedings of the 2022 7th International Conference on Social Sciences and Economic Development (ICSSED 2022)
PB  - Atlantis Press
SP  - 44
EP  - 49
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220405.009
DO  - 10.2991/aebmr.k.220405.009
ID  - Chen2022
ER  -