An audit is the check of the present condition of an enterprise. The need for data security in fields like healthcare and finance makes the blockchain a logical addition to this process. The blockchain is a secured distributed ledger suitable for a large number of applications and industries. Everyday more companies seek to add one to their operations to enhance security and efficiency. But most companies still lack the sufficient knowledge to accurately implement it and ensure it’s working as designed. This creates a new market opportunity for auditing companies. And despite the professed self-security of the blockchain, it is a new technology that too can use independent checks and verification. There are three new companies bringing different solutions to this market.
PwC BlockchainValidation Solution
Pricewaterhouse Cooper is the second largest professional auditing company in the world. As such, they bring their real world experience and expertise to the crypto market through their BVS system. Their service offers real time transaction assurance through autonomous auditing software. It involves setting up a ‘read-only’ node on the blockchain to monitor and log all transactions as they occur. Transactions are measured against a company’s risk parameters and if any exceed a certain criteria, they are flagged for review. In addition, the system offers a user friendly interface with customizable reports generated as requested. This takes the heavy lifting away from a company’s IT department and provides for reassurance to investors and stakeholders.
Quantstamp is a US based company founded in 2017. It offers a decentralized security-auditing protocol for smart contracts used on the Ethereum network. The system works through the use of validation software, nodes, and the QSP token. The automated verification uses a “Security Audit Engine” comprised of automated reasoning tools (SAT/SMT solvers), and analytical algorithms. The software identifies potential bugs and tests the validity of the code in a smart contract.
Furthermore, The heart of the protocol is the Quantstamp network; a series of validator nodes that serve as a secondary security layer using proof-of-audit consensus. A contract needs to achieve 2/3rd consensus among all the nodes to be verified and added to the Ethereum block. In addition, the system works in conjunction with the QSP token which serve as reward to find security risks in the contract. The Quantstamp main net will launch in August 2018, and is set to grow as Ethereum remains the most popular Daaps platform in the world.
Auditchain is an American start-up company that takes auditing one step further through the use of blockchain technology . It is the first decentralized audit, accounting, and live financial reporting ecosystem. Its goal is to audit and report on the financial status of a company or individual’s through metrics (balance sheets, income statements, cash flow, etc.) The Decentralized Continuous Audit and Reporting Protocol Ecosystem (DCARPE) is autonomous software that monitors and generates real time data. Its analytic software scrutinizes the data through smart contracts.
While similar to Quantstamp, Auditchain uses a network and nodes to run the protocol. However, unlike Quantstamp, it uses (Federated & Non-federated) nodes in a hybrid Proof-of-work (POW) and Proof-of-stake governance consensus mechanism. And the AUDT token incentivizes and controls node behavior. One key difference in their service is the SEC regulatory compliance embedded in the design. Auditchain is a game changer application in the digital auditing business once the platform launches, and it is sure to become a leader in the field.
In conclusion, the looming specter of government regulation, compliance will become of paramount importance for companies. Also, autonomous audits will ensure minimum disruption from audits or network failure. In addition, audits are expensive; private services are more efficient as they have greater computational capacity and reduce overhead costs. Therefore, outsourcing auditing services will become a permanent staple of the future crypto economy.