Accounting Theory Formative Research Proposal Assignment Sample

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Introduction: Accounting Theory Formative Research Proposal

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Background

Cryptocurrency is defined as the digital currency which can be alternatively used as a mode of payment. This mode of payment is prepared by using the method if encryption algorithm system. There are many different types of s with which it can be stated like Bitcoin, Ethereum, Litecoin and many other s. In this current competitive environment, the use of cryptocurrency is at its highest because the concept of online payment is increasing and as a result of this the cryptocurrency is increasing. The increased use of cryptocurrency results in making changes within the traditional accounting system (W?torek and et.al., 2021). This is particularly because of the reason that the new way of making payments is affecting the accounting policies and procedures. The current study aims to evaluate the concept of cryptocurrency and its importance within the current competitive environment. In addition to this, the present study will also assist the users in enhancing their knowledge relating to the different issues which are faced while implementing the use of these cryptocurrencies. Furthermore, the comparison of the traditional accounting standards and the changes brought within the accounting standards due to the use of cryptocurrency.

Research Aim And Objectives

Aim

To analyse the conflict present in traditional accounting systems and the development of cryptocurrency and blockchain transaction paradigms.

Objectives

To develop an understanding relating to the concept of cryptocurrency and blockchain and its significance.
To evaluate the differences between traditional accounting and cryptocurrency which necessitates the development of new accounting guidelines.
To examine the challenges faced while implementing cryptocurrency and the use of blockchain.
To recommend some of the ways through which the application of cryptocurrency can be improved.

Research question

What is the concept of cryptocurrency and blockchain and its significance?
What is the difference between traditional accounting and the cryptocurrency?
What are the challenges faced while implementing the use of cryptocurrency?
What are the different recommendations through which the use of cryptocurrency can be improved?

Rationale

In the current technologically advanced working environment the use of cryptocurrency and other digital payment methods has increased. Thus, it is very necessary for companies and users that they must effectively make use of this currency effectively in order to ensure that they are used properly. The reason for the selection of the current research topic is that it will widen the knowledge of the people using cryptocurrency. Also, the current research topic is of the personal and academic interest of the researcher and due to this, the topic is selected for the study.

Literature Review

In the views of Fang and et.al., (2022) cryptocurrency is defined as the virtual currency which can be used by a person to do effective work. The cryptocurrency is specifically designed to be a medium of exchange in which the ownership records are stored within the computerised database system (What is cryptocurrency? 2023). The cryptocurrency is not issued by the government rather it is managed and monitored by the peer-to-peer network d blockchain. This blockchain serves as a ledger which records all the transactions relating to the currency that is buying, selling, transferring and other related activities.

In contrast to this Amsyar and et.al., (2020) stated that the use of cryptocurrency is important because the person can easily transfer the money anytime without any issue and this will help them in doing the transaction easily. Along with this another importance of undertaking the use of cryptocurrency is that this method is much cheaper as compared to other different online transactions. Furthermore, the payments made through using cryptocurrency are much safer and more secure as compared to the physical transfer of money.

In addition to this Lucey and et.al., (2022) stated that when cryptocurrency is used much then it creates issues over the traditional accounting systems. This is particularly because of the reason that more use of cryptocurrency creates issues in the accounting process. The major issue faced within the accounting is that the cryptocurrency is not treated as debt and not even equity. Thus, this creates a major issue because there is not any ownership interest present. Along with this, the cryptocurrency is not accounted as a financial asset which affects the working and making of the accounts.

On a contradictory note Liu, Tsyvinski and Wu, (2022) stated that there are many different challenges faced by the companies while accounting for the cryptocurrencies. According to the IAS 38 cryptocurrency is treated as an intangible asset. This is particularly because of the reason that this standard focus on the list of intangible asset and the cryptocurrency is also listed within it. Along with this, the cryptocurrency holding is also traded over the stock exchange. This transaction is not recorded effectively because the trading of cryptocurrency is non-monetary in nature and it cannot be recorded and accounted for effectively. Furthermore, according to IAS 38 states that the intangible asset must be measured at the revaluation or the market cost.

In against this Ilham, Sinta and Sinurat, (2022) argued that there are also many different challenges which are faced while undertaking the use of cryptocurrency. This is particularly because of the reason that it does not have any physical presence and as a result of this the working is much affected and challenges are faced. The major challenge faced while using cryptocurrency is the risk of theft and hacking. As the whole work is done online, there is a high tendency for theft and hacking. This is a serious risk which is attached to the use of cryptocurrency.

Research Design

Research particulars	Description
Research type	The type of research is referred to as the way through which the research is conducted and the objectives are attained. Out of two, a study that is qualitative and quantitative, the use of qualitative study will be undertaken (Lê and Schmid, 2022). This is used for the reason that it will help the researcher in developing theoretical knowledge relating to cryptocurrency.
Research approach	The two approaches to research are present that is inductive and deductive. From the two, the researcher will be using the inductive approach in order to analyse the conflict present in traditional accounting systems and the use of cryptocurrency. The inductive approach is used because it includes setting aims and objectives which makes the study much clear.
Research Philosophy	Interpretivism and positivism are the two different philosophy which the researcher can used. From these two, interpretivism will be used by the researcher because it is more suitable with the use of qualitative research.
Data collection	Data can be gathered with the help of the different sources that are primary and secondary. In order to complete the current study based on conflicts among traditional accounting systems and the use of cryptocurrency the use of secondary sources will be used (McGill and et.al., 2021). It is used for the reason that it will provide in-depth knowledge relating to the research topic.
Data analysis	After the gathering of data, it is very necessary that it is evaluated appropriately. This analysis of the data can be done by using a thematic analysis of SPSS. In order to complete the current study, the use of thematic analysis will be made. This is particularly used by the researcher because it includes making different themes and then evaluating those using different books, journals, articles and others relating to the research topic.

References

Books and Journals

Amsyar, I., Christopher, E., Dithi, A., Khan, A.N. and Maulana, S., 2020. The challenge of cryptocurrency in the era of the digital revolution: A review of systematic literature. Aptisi Transactions on Technopreneurship (ATT), 2(2), pp.153-159.
Fang, F., Ventre, C., Basios, M., Kanthan, L., Martinez-Rego, D., Wu, F. and Li, L., 2022. Cryptocurrency trading: a comprehensive survey. Financial Innovation, 8(1), pp.1-59.
Ilham, R.N., Sinta, I. and Sinurat, M., 2022. The Effect Of Technical Analysis On Cryptocurrency Investment Returns With The 5 (Five) Highest Market Capitalizations In Indonesia. Jurnal Ekonomi, 11(02), pp.1022-1035.
Lê, J.K. and Schmid, T., 2022. The practice of innovating research methods. Organizational Research Methods, 25(2), pp.308-336.
Liu, Y., Tsyvinski, A. and Wu, X., 2022. Common risk factors in cryptocurrency. The Journal of Finance, 77(2), pp.1133-1177.
Lucey, B.M., Vigne, S.A., Yarovaya, L. and Wang, Y., 2022. The cryptocurrency uncertainty index. Finance Research Letters, 45, p.102147.
McGill, E., Er, V., Penney, T., Egan, M., White, M., Meier, P., Whitehead, M., Lock, K., de Cuevas, R.A., Smith, R. and Savona, N., 2021. Evaluation of public health interventions from a complex systems perspective: a research methods review. Social Science & Medicine, 272, p.113697.
W?torek, M., Dro?d?, S., Kwapie?, J., Minati, L., O?wi?cimka, P. and Stanuszek, M., 2021. Multiscale characteristics of the emerging global cryptocurrency market. Physics Reports, 901, pp.1-82.

Online

What is cryptocurrency? 2023. [Online]. Available through: <https://www.coinbase.com/learn/crypto-basics/what-is-cryptocurrency>