In this file:
· Blockchain makes advances, but audit firms remain wary
· Baidu’s “Xuperchain” launch is just the beginning of China’s blockchain rush
· Oman’s Largest Port Joins IBM’s Blockchain Shipping Platform TradeLens
Blockchain makes advances, but audit firms remain wary
By Michael Cohn, Accounting Today
January 09, 2020
Accounting firms are beginning to wade into the use of blockchain technology for audits, but with caution as the technology spreads beyond the cryptocurrency space where it’s been used for digital assets like Bitcoin.
“I don’t know that blockchain is going to necessarily make things easier for auditors,” said Amy Steele, an audit and assurance partner at Deloitte & Touche LLP and co-chair of the AICPA Digital Assets Working Group, and a member of the Center for Audit Quality Emerging Technologies Task Force. “I do think it’s going to impact the audit profession and change things. With the use cases within an audit firm, a number of firms are looking at how blockchain can be used within the firm to synthesize the data that we have. I would say that’s still more within the ideation phase rather than the implementation phase.”
Some of Deloitte’s clients are investing more of their funds in blockchain technology, prompting the firm to experiment with the technology. “Externally to the audit, when we think about our clients that are in different blockchain use cases, we have surveyed a number of different companies,” said Steele. “What we’re hearing is there are more investment dollars going into blockchain technology. We’re seeing a number of use cases come out now that there is a broader recognition that blockchain goes beyond Bitcoin. We’re seeing a movement to additional uses, from physical asset traceability to supply chain, pharma, all the way through to digitizing identity. But I would say most of those are still in that idea phase, and we’re working to think through what are the implications if a company puts a supply chain blockchain into place. How does that now impact financial reporting and internal controls?”
There are risks with using blockchain. Even though it relies on distributed ledger technology that is supposed to make digital assets easier to track, there have been high-profile stories in the news about Bitcoin and other digital currencies being stolen by hackers or lost when an investor can’t keep track of their encryption key or digital wallet.
“There is a real risk around security of those private keys, and from an audit standpoint when we look at digital assets on a company’s books, one of the biggest risks is do they have the rights to those assets,” said Steele. “In a digital asset environment, generally the rights to that digital asset are driven by control of a private key, so if that key is lost or stolen that asset might not belong to the entity. It’s very important for auditors and management when they’re supporting their books and records to have appropriate controls and processes in place to validate that they do indeed own and have control of that private key.”
Beyond auditing, blockchain is likely to have an impact on financial reporting and internal controls...
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Baidu’s “Xuperchain” launch is just the beginning of China’s blockchain rush
MIT Technology Review
Jan 9, 2020
Baidu, the search engine often called the Google of China, has launched a public beta version of its blockchain service for businesses, called Xuperchain, according to a local report.
What is it? The service is supposed to let small and medium-size businesses and developers cheaply launch so-called decentralized applications, or dapps. It’s also just one of the hundreds of blockchain projects in the works in China, where President Xi Jinping recently called for the nation to lead the world in blockchain technology development.
Dapps? Blockchains allow peers and competitors who don’t necessarily trust each other to share valuable data in a secure way. Decentralized applications are built using blockchain-based computer programs, called smart contracts. Members of a blockchain network can use them to automate certain kinds of transactions. For instance, the automatic transfer of valuable data from one user to another could be made contingent on another input, like a verified payment.
User-friendly: Baidu first revealed its plans for Xuperchain in September 2018. A white paper touted an innovative design and ultra-fast transaction processing speed compared with decentralized blockchains like Bitcoin. Baidu made the technology open source last May, but developers faced a number of technical challenges when they tried to deploy it, according to the news report. The new service will apparently be easier and cheaper to use, since companies won’t need as much technical expertise to deploy it.
Government-approved (read: centralized) ...
A coming wave ....
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Oman’s Largest Port Joins IBM’s Blockchain Shipping Platform TradeLens
By Rachel Wolfson, CoinTelegraph
Jan 9, 2020
On Jan. 8 the Times of Oman reported that the Port of Salalah joined TradeLens, the blockchain-based supply chain platform launched in 2018 by shipping giant Maersk and IBM.
An IBM spokesperson told Cointelegraph the addition of the Port of Salalah puts TradeLens at more than 90 ports and terminals, with over 150 participants in total on the platform.
According to the Times, The Port of Salalah is Oman’s largest port, handling a record number of 4 million shipping containers per year. The port reportedly joins TradeLens as part of its digital initiative to enhance customer experience while ensuring a global, transparent standard for collaboration with other entities in the supply chain ecosystem.
TradeLens, which is powered by IBM’s blockchain technology, enables multiple trading partners to collaborate. The platform provides a real-time, shared view of shipping transactions and data across a permissioned blockchain network. This creates transparency and efficient collaboration for all entities involved, including shippers, shipping lines, freight forwarders, port and terminal operators, inland transportation and customs authorities.
The Times notes that joining the platform provides special purpose ships and its customers the ability to securely provide end-to-end supply chain information, seamless data sharing and new avenues for collaboration. As a result, this will improve trade flows through the port.
Mark Hardiman, the Chief Executive Officer of Port of Salalah explained: