Slide 1

Auditing Mutual Distributed Ledgers




Wednesday, 4 October 2017






Chartered Accountants Hall, 1 Moorgate Place, London EC2R 6EA. Map



If you would like to attend, please contact This email address is being protected from spambots. You need JavaScript enabled to view it..



Auditing Mutual Distributed Ledgers


Wednesday, 4 October 2017, 08:30-17:00

Chartered Accountants Hall


A Long Finance Symposium


This symposium intends to explore the challenges of auditing mutual distributed ledgers (aka blockchain) and their associated systems. The seminar is organised in five parts, viz. distributed ledgers, distributed data, distributed ‘smarts’, multi-organisational issues, and what can be done. The symposium aims to conclude with a short paper on what the auditing profession needs to do to prepare itself to support these emerging multi-organisational systems.






08:30 – 08:45 Registration and Coffee


08:45 – 08:50 Welcome, Das Coin


08:50 – 09:15 Introduction, Professor Michael Mainelli, Executive Chairman, Z/Yen Group Limited


09:15 – 10:15 Paper 1 – Auditing Distributed Ledgers

This initial paper explores some of the basics of auditing any ledger and compares what makes a distributed ledger different from a traditional database ledger. This paper covers the basics of posting & checking, casting & checking, physical examination & counts, timing validation, and simple reconciliation with other ledgers.


10:15 – 10:45 COFFEE


10:45 – 11:45 Paper 2 – Auditing Distributed Data 

This second paper explores the difficulties of auditing distributed data, including testing the wider existence and effectiveness of management controls that prevent financial statement misstatement. Of particular importance are timing and timing differences such as day, month, and year-end. This paper also explores what can be done to assess and reconcile differences among distributed copies. It will also explore some of the cryptographic issues, such as the use of homomorphic encryption and zero-knowledge proofs, and what problems they create for auditors.


11:45 – 12:15 Group Exercise – The Futures Wheel


12:15 – 12:30 Group Assessment


12:30 – 13:30 LUNCH




13:30 – 14:30 Paper 3 – Auditing Distributed ‘Smarts’

This third paper examines the complexity of embedded code in ledgers, looking at two areas in particular, ‘smart contracts’ and ‘money supply algorithms’. This paper will set out some of the challenges for auditors in ‘provable algorithms’ and other technical tests for code validation. It will also question how embedded code, e.g. ‘sprites’, or dynamic anomaly & pattern response systems, or direct participation via a node(s), might be used to help auditors.


14:30 – 15:30 Paper 4 – Auditing Consortium Blockchain Systems

This fourth paper explores the difficulties of dealing with multiple organisations. Inherent to this is an examination of the ‘governance’ or ‘constitution’ underlying a shared resource, as well as the verification of existence, ownership, title and value of assets, and determination of the extent and nature of liabilities among multiple parties. Further, this paper touches on the importance of automated cybernetic approaches, for example simulation.


15:30 – 16:00 GROUP EXERCISE WITH COFFEE – “Towards A Trained Profession And An Auditing Standard”

  • People
  • Processes
  • Standards
  • Measurement


16:00 – 16:15 Group Feedback


16:15 – 16:45 Group Summarisation – “What Should The Profession Do?”


16:45 – 17:00 Closing Remarks, Professor Michael Mainelli, Executive Chairman, Z/Yen Group Limited


17:00 Networking & Drinks