PwC partners Northern Trust to launch blockchain audits

22 March 2018 3 min. read
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Big Four professional services firm PwC has partnered global asset management company Northern Trust to launch a new blockchain-based auditing system. The platform will enable audit firms to access fund data stored on a private equity blockchain, in order to audit specific events in real time.

Northern Trust announced the launch of what it believes to be the first commercial implementation of blockchain technology for private equity at the end of February, allowing a limited number of clients to manage ownership shares on a transparent Distributed Ledger Technology (DLT) platform. The company, which reportedly holds over ‎$123.9 billion in assets, says the solution is based on the open source Linux Foundation Hyperledger Fabric, using IBM’s blockchain platform to provide safety and scalability of transactions.

According to Chicago-based Northern Trust, a latter development of the system means audit firms can now have their own blockchain node, managing access to relevant fund data that enables real-time audit-capabilities. This most recent development was made in partnership with auditing giants PwC, and is designed to provide auditors with instant access to a secure “golden copy” of private equity lifecycle events. The firms hope that this will improve the efficiency of the auditing process, making the underlying transactions more transparent to audit firms.PwC partners Northern Trust to launch blockchain auditsIn a statement, PwC said that the auditing tool created with Northern Trust was custom-built with the bank and is separate from the technology revealed last week, with potential opportunities for them to "interface" in the future.

Commenting on the potential future applications of the platform, Guernsey-based PwC Partner Nick Vermeulen, added, "Our ability to directly access distributed ledgers such as the one within the Northern Trust system will allow us to build upon our own blockchain investments."

Blockchain technology is being widely accepted by various businesses and institutions around the world to improve the efficiency, safety, and speed of information exchange. The Big Four professional services firms of PwC, and its competitors DeloitteKPMG and EY are no exception to this. Each of the gang of four has released its own report on the role that blockchain will play in the future of auditing, while implementing new solutions for clients based around the technology.

Recently, this saw PwC itself work with Arc Net to implement a food supply chain solution using blockchain to prevent fraud. EY, meanwhile, extended its partnership with SAP to increase the deployment of blockchain globally, and KPMG backed the plans of start-up Etch, a firm looking to leverage the technology to improve efficiency and security of payroll procedures.