Professional services giants around the world are playing an increasingly important role in the cryptocurrency sphere, according to a new report from CoinTelegraph: indeed, the ‘Big Four’ of the multinational professional services firm world–Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY) and KPMG–are all gearing up their capabilities to serve crypto and blockchain firms.
As such, the role of PwC and other professional services firms seems to play an increasingly important role in cryptocurrency adoption across the globe. Henri Arslanian, PwC’s global crypto leader, said that since he joined PwC three years ago, there has been a marked increase in the firm’s crypto-related business dealings.
Specifically, PwC has formed “crypto teams” in 20 countries, consisting of 200 people that perform tax and accounting challenges, as well as audit and assurance services for crypto-related projects.
“Just within the cryptocurrency sector, we’ve conducted over 350 engagements in the last 18 months,” Arslanian said.
Additionally, “over the last couple of months, we’ve expanded our work. We recently closed the first-ever crypto fundraising deal at PwC, in which we led a $14 million Series A round for a Swiss-based crypto firm with Asian family offices. We are also the auditor for BC Group, a publicly listed crypto company in Hong Kong.”
Even ‘trustless’ systems need auditors
Although cryptocurrency and blockchain systems are built to be “trustless”, in that they are decentralized, Henri Arslanian told CoinTelegraph that auditing these systems is necessary to provide a greater sense of trust to the traditional financial world.
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“Although Bitcoin was designed with a trustless ideology, the reality is that the industry still requires trusted entities to catalyze the development of the ecosystem,” he said.
Hugh Madden, chief executive of BC Group (which has used PwC as an auditor for two years), told CoinTelegraph that having regular audits of cryptocurrency systems lends confidence to investors and users who may otherwise be skeptical.
“Auditing, like regulatory clarity, provides confidence to all stakeholders that companies are operating transparently and adhering to expected industry standards,” he said. “As the business of digital assets continues to grow and mature, and compliance and regulatory standards become more robust, auditors will continue to play a pivotal role.”
Indeed, last year, KPMG and Forbes Insights conducted a survey among finance executives to determine the importance of blockchain expertise in auditing: 79% of respondents said that they expect their auditor to explain blockchain’s impact on their business and on the financial reporting environment.
Erich Braun, KPMG United States blockchain audit leader, told CoinTelegraph that as audits of blockchain systems become the expectational norm, blockchain systems should increasingly be intentionally developed in compliance with accounting standards, as well as other regulatory requirements.
“SEC issuers will want to design blockchain technologies to support the entity’s internal control over financial reporting,” Braun said.
“Being able to demonstrate how these technologies achieve their objectives in a well-controlled environment is critical to a successful blockchain strategy. If the technology is not auditable, the immense benefits it brings, such as increasing efficiencies and cutting costs, may not be realized.”