The Future of Financial Reporting and Accounting in the Metaverse

Closes:
Journal
Journal of Financial Reporting and Accounting
Guest editor(s)
Dr. Abdalmuttaleb Al-Sartawi, Professor Khaled Hussainey,
Submissions open 1st December 2022

Overview about the Special Issue 

This Journal of Financial Reporting and Accounting SI calls for papers which focus on the role and future of financial reporting and accounting in the metaverse. More specifically, it calls for contributions on a wide variety of interdisciplinary topics to promote primary research and to bridge the gap between accounting theory and practice in the era of digitalization and the metaverse. This call is inspired by the ubiquitous megatrend that is the metaverse. Accounting and auditing firms have actively responded by investing millions of dollars in the metaverse.  

However, this is a new territory in the accounting literature. Hence, there is a need for research which focuses on financial reporting, accounting, and accounting professionals in the Metaverse. With the explosion of technological development in the digital era, the Metaverse is rapidly emerging, and issues such as virtual environments, non-fungible tokens (NFTs) (digital assets), digital twins, Metaverse commerce, cybersecurity are becoming realities in the field of accounting (Al-Sartawi, 2020).   

This special issue aims to become an essential resource and reference work for researchers interested in the future of accounting in the digital age, in particular the metaverse. Additionally, this SI opens the conversation and encourages researchers to investigate the challenges and opportunities for financial reporting and accounting in the Metaverse, and to provide solutions on how to take advantage of the inevitable changes in the field. The SI welcomes exploratory research and empirical research built on either primary or secondary data. 

The target audience for this special issue includes: (1) accounting professionals, practitioners, and auditors, (2) policy makers and regulators, (3) academics and educators, (4) researchers and students.   

The context behind the Special Issue 

Digital transformation, although affecting all industries, is impacting differently organizations with a high degree of technological orientation such as finance, accounting, and auditing firms. The emergence of the Metaverse and Industry 5.0 is catalysed by technologies such as Artificial Intelligence, big data, blockchain, Internet of Things (IoT), extended reality, and 5G. These technologies are quickly maturing and advancing for mainstream use fuelled by the COVD-19 pandemic (Lee et al., 2021). Thus, the digitalization of accounting and auditing practices represents one of the major paradigm-shifts that have distinguished the last years. It is not a choice for accountants and auditors to immerse themselves in technology anymore due to its disruptive impact on organizations. “The metaverse is here to stay. Within five years everyone is likely to be using it in some shape or form.” EY’s Global Leader Blockchain Tax Services, Dennis Post (April 2022). As such, it is high time that researchers and academics explore and examine the metaverse and this Special Issue can be the starting point. 

The Big 4 have published several articles on their websites exploring the Metaverse. For example: ‘The Metaverse — Accounting Considerations Related to Nonfungible Tokens’, (Deloitte, June 21, 2022). The number of website articles on this topic has been steadily increasing in 2022 (Deloitte, April 2022; Deloitte, June 2022; EY, February 2022). Additionally, KPMG (Ravi, 2022) has entered the metaverse via a collaboration hub. The hub will serve as a cyberspace for clients, employees, and communities to come together. It will also be used for accounting education, training, seminar, and workshops. This has implications on the working conditions of accounting professionals, accounting education, including innovation and economic growth. 

According to Chukwuani (2022), there are both benefits and limitations to virtual reality accounting. An important benefit of virtual reality in accounting is that practitioners can perform functions ranging from taking stock of inventory to attending work virtually. It allows users to improve immersion, perception, and cognition of a vast amount of synthesized data in the growing digital world. There will be less paperwork and more productivity by using technologies. However, Chukwuani (2022) briefly mentions the limitations of these platforms such as privacy, security, denial of service, and information reality. It is necessary for researchers to explore and examine these opportunities and risks associated with the future of accounting. 

While professionals have started to examine novel ideas about the Metaverse, academics and researchers are severely lagging. Accordingly, there is a need for research in the field of accounting to provide new insights and assess the pitfalls of the Metaverse.  

Topics range: 

The special issue calls for papers in the following topics (but not limited to):  

  • Forward-looking disclosure about the Metaverse 

  • New dimensions of social and sustainable reporting  

  • Blockchain, NFTs and cryptocurrency reporting 

  • Accounting considerations for non-fungible tokens (NFTs) and Metaverse commerce 

  • Accounting for blockchain and rights associated with virtual assets and services 

  • Revenue recognition in the Metaverse 

  • Exploring ASC 350 Intangibles: Goodwill and Other in the digital era 

  • Principal-Versus-Agent Considerations of NFTs 

  • Novel tax issues in the Metaverse/Web 3 

  • Tax jurisdictions and legal liability concerns 

  • Tax Consequences of Nonfungible Tokens 

  • Intellectual property in the world of the Metaverse 

  • Governance issues in the Metaverse: content and conduct regulations 

  • Cybersecurity and ethical considerations in the Metaverse 

  • Opportunities and challenges for accounting in the Metaverse 

  • Virtual Audit Firms and remote auditing 

Submission Instructions and Important Dates:

  • Full paper submission deadline: 1 April 2023 

  • Final acceptance deadline: 15 July 2023 

  • Academic papers will undergo the customary rigorous review process by at least two independent reviewers. 

The guest editors’ welcome enquiries from those who are interested in submitting. Any queries or enquiries about the special issue should be directed to any of the editors 

  • Dr. Abdalmuttaleb Al-Sartawi, Associate Professor, Chairperson of the Accounting, Finance and Banking Department, Ahlia University, Kingdom of Bahrain, [email protected] 

  • Professor Khaled Hussainey, Professor, Professor of Accounting and Finance, Faculty of Business & Law, Accounting & Financial Management, University of Portsmouth, [email protected] 

References:

  1. Al-Sartawi, A., (2020), Information technology governance and cybersecurity at the board level. International Journal of Critical Infrastructures,16 (2), 150-161. 

  1. Chukwuani, V. N. (2022). Virtual Reality and Augmented Reality: Its Impact in the Field of Accounting. Journal of Management, 4(2), 35-42. 

  1. Deloitte. (April 2022). https://www2.deloitte.com/content/dam/Deloitte/us/Documents/technology/us-ai-institute-what-is-the-metaverse-new.pdf 

  1. Deloitte. (June 2022). https://dart.deloitte.com/USDART/home/publications/deloitte/accounting-… 

  1. EY. (April 2022). https://www.ey.com/en_gl/tax/how-the-metaverse-and-web3-are-creating-re… 

  1. EY. (February 2022). https://www.ey.com/en_gl/digital/metaverse-5-questions-shaping-the-next… 

  1. Lee, L. H., Braud, T., Zhou, P., Wang, L., Xu, D., Lin, Z., ... & Hui, P. (2021). All one needs to know about metaverse: A complete survey on technological singularity, virtual ecosystem, and research agenda. Journal of Latex Case Files, 14(8), 1-66.  

  1. Ravi. (2022). KPMG Enters the Metaverse, Invests $30M On Web3 Training. Published by NFT Evening. https://nftevening.com/kpmg-enters-the-metaverse-invests-30m-on-web3-tr…