Slide 1

Auditing Mutual Distributed Ledgers




Wednesday, 4 October 2017






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



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Auditing Mutual Distributed Ledgers


Wednesday, 4 October 2017, 08:30-18:00

Chartered Accountants Hall


A Long Finance Symposium


The symposium explored the challenges of auditing mutual distributed ledgers (aka blockchain) and their associated systems. The day was structured around four papers and was made a success thanks to the delegates' generous contributions.  As a result of everyone's thoughts, opinions, and questions, a report on what the auditing profession needs to do to prepare itself to support these emerging multi-organisational systems is soon to follow.  For the time being, you can download the four papers and have a look at the results of the first group exercise below.


Download Paper 1 – Auditing Distributed Ledgers

Download Paper 2 – Auditing Distributed Data 

Download Paper 3 – Auditing Distributed 'Smarts' 

Download Paper 4 – Auditing Consortium Blockchain 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 – 10:10 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.

10:10 – 10:35 COFFEE

10:35 – 11:30 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.

11:30 – 12:00 Group Exercise – The Futures Wheels

The Future Wheel is a structured brainstorming method used to organise thinking about future events, issues, trends, and strategy.

Click below to see the futures wheels created on the day.

Wheel 1

Wheel 2

Wheel 3

Wheel 4

12:00 – 12:15 Group Assessment

12:15 – 13:10 LUNCH



13:10 – 14:05 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.

14:05 – 15:00 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.

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

  • People
  • Processes
  • Standards
  • Measurement

15:30 – 15:45 Group Feedback

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

16:15 – 16:30 Closing Remarks, Professor Michael Mainelli, Executive Chairman, Z/Yen Group Limited

16:30 - 18:00 Networking & Drinks