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Northern Trust strengthens private equity audit via blockchain technology

Northern Trust strengthens private equity audit via blockchain technology

Friday 23 March 2018

Northern Trust strengthens private equity audit via blockchain technology

Friday 23 March 2018

Northern Trust has announced that audit firms can now carry out audits of private equity lifecycle events directly from the blockchain.

The latest enhancement allows an audit firm to have its own blockchain node, providing access to relevant fund data to enable real-time audit capabilities.

Northern Trust, working with PwC and other audit firms in Guernsey, has proved that auditors can now access fund data held on the private equity blockchain to audit specific events.

This development gives the audit firms access to a “golden copy,” or immutable master record, of the fund’s data from their own offices. The audit firms can then either transfer the required data into internal applications to complete the audit process or develop new tools that allow them to complete the audit directly from the blockchain itself.

Continuing development of the audit capabilities and the automation of the audit process by PwC  will allow audits to be completed in real time as lifecycle events occur. This will help ensure that audits are more streamlined and efficient, increasing transparency of the underlying transactions to the audit firms.

Nick Vermeulen, partner at PwC Channel Islands said: “We are excited to be able to leverage the distributed ledger within Northern Trust's private equity system to innovate our approach to auditing private equity funds. Our ability to directly access distributed ledgers such as the one within the Northern Trust system will allow us to build upon our own blockchain investments. Such innovation assists clients as they invest in the opportunities arising from emerging technologies. This ongoing process will help ensure we are in the best possible shape to adapt in the coming years of change.”

The solution developed by Northern Trust is based on the open source Linux Foundation Hyperledger Fabric. Northern Trust is also using the IBM Blockchain Platform on the IBM Cloud to develop and run the network with hardware assisted cryptography and key management to enhance the safety and scalability of these transactions.

Pictured: Nick Vermeulen, partner at PwC Channel Islands

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