External consensus validation for cryptocurrencies was introduced on October 31, 2008 in the original Satoshi Whitepaper. Since the release of the Genesis Block of the Bitcoin Blockchain, scores of blockchains have implemented external consensus validation through different Proof of Work “PoW” and Proof of Stake “PoS” mechanisms. All of which are designed to validate transactions.
A transaction doesn’t just have to involve the movement of units of value. A transaction can be a set of events and transactions that make up say, a financial statement. Since 2009, regulatory jurisdictions have been slowly upgrading the ability for filers to increase transparency. Software vendors have moved in lock step to help the largest public filers of financial statements to streamline and speed up the form and substance of financial statements.
Auditchain is designing a similar external consensus validation protocol for enterprise data sets. We call it Decentralized Continuous Audit & Reporting Protocol Ecosystem™ or “DCARPE™”, a Proof of Assurance (“PoA”) mechanism that requires a cohort of CPAs or CAs to arrive at a consensus validation of the reporting enterprise data sets on a continuous and chronological basis and score the data sets based on each auditor’s confidence in each data set of the reporting enterprise.
These data sets contain large and complex volumes of data. Currently, financial statements are produced in various different ways; by human hand, for the small business to complex ERP systems that automatically produce financial statements.