Auditors are working at a feverish pace to dispel the mystery surrounding cryptocurrency, the Financial Times reports.
Hundreds of blockchain and cryptocurrency experts are finding work at major firms such as EY, PwC and KPMG, as the demand for digital assets among their clientele outpaces their current auditing capabilities for the emerging technology.
“It’s a no brainer,” Jeanne Boillet, global assurance innovation leader at EY, tells the Financial Times. According to the outlet, the firm had more than 150 clients worldwide involved in crypto assets as of September. “We have no choice than to address this because some of our clients have invested in that space.”
“We are devoting significant resources to how we might provide audit services in not just cryptocurrency, but blockchain.”
PwC also has stepped up its internal resources, adding 400 cryptocurrency experts to their ranks. “We are in the midst of a rather significant effort,” said Ralph Weinberger, leader of Pwc’s global network assurance methodology group, to the Financial Times. “We are devoting significant resources to how we might provide audit services in not just cryptocurrency, but blockchain.”
Even as cryptocurrency prices have been volatile due to mounting concerns of fraud and vulnerability, these firms believe blockchain cannot be discounted as a mere trend and have created in-house blockchain auditing tools.
Complicating these efforts is the lack of consensus on how to approach auditing for digital assets, leaving firms to develop their own processes.
“It’s really about proper careful application of current rules and reading the lines between what fits and what makes sense,” David Lyford-Smith, technical manager at the Institute of Chartered Accountants in England and Wales, told the Financial Times. “But that does lead to some disagreements about what’s the best treatment.”
Other challenges include drastic swings in pricing, the inability to verify ownership and reputation issues, Jatin Patel, a director in the investment management and funds audit practice at KPMG told the Financial Times.