Big Four auditors move on blockchain trial
It has emerged that EY, KPMG PwC and Deloitte – the so-called ‘Big Four’ accounting firms – are to trial an interim financial reporting pilot in Taiwan using blockchain technology.
The four major accountancy giants, according to Coindesk, will see external confirmation procedures, necessary for audit evaluation, accepted from a number of publicly-traded companies.
FISC to showcase tech improvements
The trial includes up to 20 Taiwanese banks which will validate financial information at key points. The pilot has been part-organised and supported by Taiwan’s Financial Information Service (FISC).
The FISC, backed by both public and private capital, has steadily been building up its blockchain capabilities since 2017. Should the trial succeed it is expected the auditing service could be offered to more than a thousand publicly-traded Taiwanese companies by the end of 2019.
ICAEW support in principle
The development may well be copied in other jurisdictions. Most of blockchain’s architecture is, per se, accounting technology. The UK’s Institute of Chartered Accountants in England and Wales (ICAEW) has been clear on the benefits of blockchain for some time.
“Auditing is not just checking the detail of whom a transaction was between and the monetary amount, but also how it is recorded and classified,” the ICAEW says. “If a transaction credits cash, is this outflow due to cost of sales or expenses, or is it paying a creditor, or creating an asset?”
It adds: “These judgemental elements often require context that is not available to the general public, but instead require knowledge of the business, and with blockchain in place, the auditor will have more time to focus on these questions.”