Deloitte, Ernst & Young (EY), KPMG and PricewaterhouseCoopers (PwC) have joined a consortium of 20 major banks to trial a revolutionary blockchain financial reporting service to audit public companies in record time.
The world’s largest accountancy firms, also known as the ‘big four’, will initially be piloting the new blockchain service developed by the banking consortium in Taiwan, with the cooperation of Taiwan’s Financial Information Service Co. (FISC).
The plan is to then expand the trial system to over 1,400 publicly-listed companies in China, starting in 2019.
The platform aims to streamline the ‘external confirmation’ processes for auditing companies interim financial reports by utilising the immutability of blockchain technology.
The FISC, created under Taiwan’s Ministry of Finance and now an independent body handling both public and private capital, has said that it anticipates that the platform will:
reduce confirmation times from an average of “half a month” to “within a day”
Currently, the system requires an auditor to manually obtain and verify audit evidence of a company’s transactions with third parties such as banks, who are also filling in the relevant information manually for these auditors.
The platform will integrate the banks company transaction data automatically onto a tamper-proof distributed ledger, creating a verifiable network of data that will be accessible by the participating audit firms, thus completely transforming the process we know today.
The accounting and banking industries were two of the first to be cited for which blockchain could be a disruptive technology, however they have also been the first to embrace and utilise it. This pilot marks a significant milestone for them both.
Each of the ‘big four’ agencies have released reports this year, indicating that businesses who do not begin integrating blockchain systems are at risk of falling behind. A recent report by Deloitte says that blockchain will become:
“a standard operational technology across the financial, manufacturing and consumer industries”
Indeed, all of the firms are involved in different consortia, such as the Enterprise Ethereum Alliance, Hyperledger and R3, testing blockchain platforms within a variety of industries, from shipping and insurance to supply chain management.