Auditchain: Blockchain based Financial Audit and the Assurance Report

Blockchain was first introduced as the core technology behind Bitcoin, the headline-grabbing decentralized digital currency ecosystem proposed in 2008. The appeal of blockchain technology lies in its use of peer-to-peer network technology combined with cryptography. This combination enables parties who do not know each other to conduct transactions without requiring a traditional trusted intermediary such as a bank or payment processing network. By eliminating the intermediary and harnessing the power of peer-to-peer networks, blockchain technology may provide new opportunities to reduce transaction costs dramatically and decrease transaction settlement time. Blockchain has the potential to transform and disrupt a multitude of industries, from financial services to the public sector to healthcare. As a result, a number of venture capital firms and large enterprises are investing in blockchain technology research and trials to re-imagine traditional practices and business models.

In recent years, blockchain technology has evolved far beyond bitcoin and is now being tested in a broad range of business and financial applications. However, blockchain technology is still emerging and has not yet been proven at enterprise scale, which is a fundamental challenge to blockchain’s transformative potential. In addition, many accounting firms have undertaken blockchain initiatives to further understand the implications of this technology. It is important for the audit and assurance profession to stay abreast of developments in this space, and we encourage traditional Auditors to learn more about this technology.

The Potential of Blockchain on the Financial Audit and the Assurance Report

Blockchain technology offers an opportunity to streamline financial reporting and audit processes. Today, account reconciliations, trial balances, journal entries, sub-ledger extracts, and supporting spreadsheet files are provided to an auditor in a variety of electronic and manual formats. Each audit begins with different information and schedules that require an auditor to invest significant time when planning an audit. In a blockchain world, the auditor could have near real-time data access via read-only nodes on blockchains. This may allow an auditor to obtain information required for the audit in a consistent, recurring format.

As more and more entities and processes migrate to blockchain solutions, accessing information in the blockchain will likely become more efficient. For example, if a significant class of transactions for an industry is recorded in a blockchain, it might be possible for an auditor to develop software to continuously audit organizations using the blockchain. This could eliminate many of the manual data extraction and audit preparation activities that are labour intensive and time consuming for an entity’s management and staff.

Currently, a blockchain startup, Auditchain, announces the pilot project of blockchain audit technologies that enhances the ability to perform an in-depth review of business transactions. The proprietary technology is designed to support financial audit and assurance report and will lay the foundation on blockchain assets, liabilities, equity and smart contracts.

Auditchain: World's First Continuous Audit and Real Time Financial Report

Auditchain is a decentralized platform that continuously collects reports, information from production, from businesses, checks them and immediately issues verification protocols without intermediaries and third parties who might be interested in falsifying documents. This greatly speeds up the process of getting recommendations to improve performance and vision of the whole picture.

Companies will no longer need to look for independent auditors who may not always be qualified and worry about the results, professionalism and disclosure of confidential information to third parties. All this will be implemented on one platform and will be done with the help of AUDT tokens and checked by a network of certified accountants.

At the head of the auditors is DCARPE Alliance, which provides all the necessary tools and assistance for the implementation of this protocol in businesses. Tokens AUDT will help create a new economy of trust and will help to guarantee and safely disclose information of enterprises and constantly check the activities to quickly identify solutions to those problems that are already beginning to slow down the process.

Writer's Final Thought

Blockchain technology has the potential to impact all recordkeeping processes, including the way transactions are initiated, processed, authorized, recorded and reported. Changes in business models and business processes may impact back-office activities such as financial reporting and tax preparation.

Auditchain will be a very necessary and important platform since it enables to capture, process, audit and report enterprise data and performance data on a real time continuous basis under a continuous independent audit exceeding current accounting, audit and control standards. Thus, it may assist many investors, large companies to make a decision to invest in small and medium-sized businesses, as they will receive continuous up-to-date information.

Thank you for reading!

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