ibtimes.co.uk / Ian Allison / August 18, 2015
Back in the late 1990s the cryptographer Nick Szabo predicted the paper-era techniques of auditing and accounting would be dramatically augmented by, and eventually integrated into, smart contracts.
The last year or two has seen lots of opinion about the extent to which distributed ledger technology, combined with real time audit potential proven by cryptocurrency, would impact the transfer of value and trust located within centralised database systems.
Some have said auditors, for instance, fall squarely in the gun-sights; others believe large professional services firms could be the ideal conduits of disruptive technologies, assessing and aligning value derived from them with their clients across the supply chain.
Regarding the bald execution of digital code, it’s worth remembering that an audit is an opinion provided on the financial statements of a company based on pre-determined accounting guidelines (most commonly International Accounting Standards). The role of the auditor is to provide the trusted voice that states that opinion.
The large accountancy firms are all getting their heads around this technology at this time. Matthew Spoke of Deloitte Canada is the leader of the Rubix Project, tasked with delving into distributed ledger offerings such as Ethereum, Eris, Ripple and Hyperledger, in first instance, to assess their pros and cons.
Spoke told IBTimes: “The first proof of value we are looking at is essentially in the auditability of information, so applying a blockchain database infrastructure to processes that traditionally do not have easy to follow audit trails.
“There is a lot of great research coming out of all of the big four and other consulting firms as well. My team is trying to differentiate ourselves a little bit – in addition to trying to understand this technology and telling people what we have learnt, we think we could be in an interesting position to start implementing and testing some of these technology solutions.