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World’s 4 Largest Accounting Firms Move Into Crypto Auditing

World's 4 Largest Accounting Firms Move Into Crypto Auditing

The last few months have seen both EY (formerly Ernst & Young) and PwC launch two separate blockchain auditing services. This comes as the use of blockchain is raising the very real possibility that traditional accounting firms may find themselves obsolete in the near future. Some are seeing the release of blockchain auditing tools from the ”Big Four” accounting firms as measures needed to remain relevant, whilst part of the community is welcoming the increased interest from accounting industry behemoths as validation over the importance of blockchain and cryptocurrencies. However, it is unclear exactly what effects an entry into the blockchain industry by Big Four members might actually end up having.

The ”Big Four” is a term used to refer to the world’s four largest accounting firms, consisting of EY, PwC, Deloitte, and KPMG. The fact that both EY and PwC have recently released sets of tools to improve and allow more efficient audits of cryptocurrency transactions between businesses indicates that the Big Four are very much aware of the growing interest in crypto and blockchain.

EY’s EY Blockchain Analyzer, which was announced at the end of April, is a system intended to improve the analysis and review of blockchain transactions. Its release joins a decision announced by PwC in March to use blockchain technology in order to perform private equity audits. Improved means of audit for both businesses and private persons might sound like something that will help realize the cryptocurrency industry’s goals of improved transparency and security. However, this decision might not have the overarching effects some are expecting it to.

First and foremost, it seems as if both EY’s and PwC’s tools will be limited to private blockchains. This means that only businesses that operate on private blockchains will be able to use the audit tools. This decision is likely motivated by a necessity, as experts are predicting that companies validating their transactions on a public blockchain would render the role of large auditor firms nearly redundant, or at the very least severely diminished.

Developing audit tools that solely support private blockchains may therefore very well slow the adoption of public blockchains, meaning that the Big Four would remain relevant longer for companies. These suspicions do not seem impossible, as they have arisen amid reports from several analyst firms that the big accounting firms are also actively lobbying for certain blockchain regulation, in order ”to position themselves as the obvious choice” for businesses, as Csilla Zsigri, an analyst at 451 Research, put it.  

In summary, it is therefore obvious that these tools from PwC and EY have not in any way been released in acts of altruism, and neither do they seem to be the result of a belief in the capabilities of the blockchain. Rather, they are likely to be part of a general auditing firm agenda that aims to ensure that they remain necessary in the future as well. Although a move to the blockchain for companies’ auditing efforts would in all likelihood increase transparency and accuracy, one cannot help but ponder the possibility that both PwC and EY are first and foremost doing it in order to further their own agendas.

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