Northern Trust Strengthens Private Equity Audit via Blockchain Technology with PwC

Mar 19 2018 | 1:56pm ET

Northern Trust announced today that audit firms can now carry out audits of private equity lifecycle events directly from the blockchain, following its launch of commercial deployment of blockchain technology for private equity in February 2017.

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 an 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.

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.

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.

“By expanding our private equity blockchain ecosystem to the audit community, Northern Trust has enabled audit transactions to be recorded on a blockchain in real time,” said Pete Cherecwich, president of corporate & institutional services at Northern Trust said in a statement. “This will result in direct efficiencies to both the audit firms and Northern Trust, and provide investors with a more timely and valued assurance product.”

Northern Trust Corporation (Nasdaq: NTRS) is a provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust Northern Trust had assets under custody/administration of US$10.7 trillion, and assets under management of US$1.2 trillion as of December 31, 2017.


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