Back to top

Frequently Asked Questions

Topics

Innovation

Privacy and Information Security

Scalability

Regulatory Compliance

Implementation of Auditchain

Audit Types

Token Structure and Allocation

Innovation

How will Auditchain change financial reporting?

Currently an audit opinion on fairness of the financial statements, the status of internal controls, as well as auditor service organization control reports are rendered within a considerable time after the financial statement period.

  1. It is expected, that Auditchain will offer the real time reporting of financial statements. Rather than providing an audit opinion on historic information, Auditchain will provide audit analytics that indicate the level of assurance that associated transactions are also considered both mathematically correct as well compliant with GAAP and/or IFRS, as audited.
  2. It is expected that Auditchain will offer an open source library of GAAP and IFRS compliant smart contracts that will be sufficient to capture, enforce and process GAAP and/or IFRS output compliant enterprise data, as well as the immediate presentation of financial statements available to stakeholders on a permissioned basis or to the general public.
  3. As long as the data inputs and the transactions are meeting rigid protocol requirements, the financial data will be deemed as audited and deemed reliable once it has been processed by the network.
  4. System and Organization Control audits will play a much larger role in the processing and presentation of financial statements.
Who can use Auditchain? Is it only private companies, or will it be available to public companies and non-profit organizations?

Auditchain will be suitable for private companies such as venture backed startups as well as publicly traded companies, non-profit organizations and governments.

Privacy and Information Security

The use of a blockchain means that information is stored within multiple nodes among many servers worldwide. Does that mean anyone will be able to access and view financial statements and organizations’ internal information because of such proposed transparency?

Source data is stored off-chain and protected by the owner but a hash value referencing the actual data representative of a transaction as well as its location will be added on-chain.

Scalability

How will scalability questions be addressed in the Auditchain ecosystem?

Scalability is addressed through the integration of enterprise private blockchains with the Auditchain public ledger.

Storing data outside of the blockchain means that it is not in the blockchain? What can guarantee that such data is not tampered with?

Smart contracts automate the production of a hash value to the blockchain. As enterprises adopt and utilize smart contracts, the need for scanned PDFs will decrease. Our own Chief Scientist, Dr. Stuart Haber was the first person to cryptographically time-stamp a digital document. See https://crl.anf.es/pdf/Haber_Stornetta.pdf

Dr. Haber’s digital time stamping technique was centrally referenced by Satoshi Nakamoto in creation of Bitcoin. See references 3, 4 and 5 in the bibliography of https://bitcoin.org/bitcoin.pdf

Including information on a blockchain means that information is stored on the blockchain forever or as long as the network is operational. Does that mean there will be a lot of information stored on the Auditchain blockchain and how will Auditchain store that much information?

Only a hash value is stored on the blockchain. A bit string is a value representing a string of bits, each character represents one bit. A SHA 256 bit string contains 32 bits which do not occupy much storage. A SHA 256-bit string can represent a significant amount of data off-chain.

Regulatory Compliance

Entities are currently facing a wide variety of regulatory requirements. How will the Auditchain ecosystem be a solution to all of them?

Auditchain will develop and deploy a open source library of accounting treatment smart contracts. Smart contracts will be developed for all regulatory requirements, whether it is US GAAP, IFRS, statutory reporting, Governmental accounting or reporting or any other reporting requirement.

Who will develop those smart contracts that address regulatory requirements?

If rapid adoption occurs, the Auditchain community will be dispatched to develop new and unique smart contracts though our bounty program.

Implementation of Auditchain

Currently, ERP systems cost hundreds of millions of dollars to implement. How do you expect that Auditchain will replace accounting systems?

Auditchain is not a direct competitor to large and small accounting systems. We don't expect to replace them any more than you should expect diesel trucks to be completely replaced by electric commercial vehicles. Legacy system integration is a focal point of our ecosystem. As enterprise architecture evolves from analog legacy systems to cryptographic architecture, Auditchain will enable interoperability.

Auditchain expects to collect a relatively modest amount from its ICO. How do you expect to compete with other products that cost billions of dollars to develop?

We are not developing ERP software. We are simply developing a cyptographic highway that is traveled by an army of decentralized external audit nodes. The cost of developing the node requirements is far less than developing ERP software.

How long does it take for an implementation?

The length of time for an implementation depends on the size of the enterprise. A service enterprise with annual revenue of $100,000,000 may take less time than a manufacturing enterprise of equal size.

Audit Types

What is a system and organization control “SOC” audit?

A SOC audit is a specialized audit CPAs provide in connection with system-level controls of a service organization or entity-level controls of other organizations. See AICPA’s description of a SOC audit https://www.aicpa.org/interestareas/frc/assuranceadvisoryservices/sorhome.html

What is a financial statement audit?

To a publicly traded company, the financial statement audit offers credibility. To its shareholders, it offers comfort. And to all stakeholders — including the market at large — the external audit offers confidence. See PwC’s description of a financial statement audit; https://www.pwc.com/gx/en/services/audit-assurance/publications/understanding-financial-audit.html

Token Structure and Allocation

What is the total AUDT token supply?

The total supply of AUDT is 250,000,000, however, there will be approximately 237 additional AUDT emitted per block, as proposed, assuming 10 minute block times.

How are the tokens allocated?

The AUDT allocation is as follows; (i) 160,000,000 to be sold in the TGE, (ii) 25,833,333 to be distributed to the team, (iii) 25,833,333 reserved and distributable to advisors, (iv) 25,833,333 reserved and distributable to partners and providers of applications and services to the Auditchain network and (v) 12,500,000 reserved and distributable in connection with bounties.