Ey (Ernst & Young) Launches Blockchain-enabled Solution for Secure Business Agreements

EY (Ernst & Young) has recently introduced a groundbreaking blockchain-enabled solution called EY OpsChain Contract Manager (OCM). This tool is designed to streamline complex business agreements, reduce costs, and enhance security.

EY OpsChain Contract Manager (OCM) runs on the Ethereum public blockchain, enabling truly decentralized operation in a trust-worthy environment. EY OCM helps enterprises to execute complex business agreements, supporting confidentiality, helping improve time efficiency, and achieving cost reduction, with automatic adherence to the agreed terms.

Purpose and Features

Contract Management: EY OCM facilitates the fulfillment of complex, multi-party business agreements while ensuring confidentiality and adherence to agreed-upon terms.

Data Synchronization: It synchronizes data across business partners, enabling uniform enforcement of key business terms such as standardized pricing, volume discounts, rebates, and strike prices.

Zero-Knowledge Proofs (ZKPs): To enhance contract integrity and mitigate value leakage, EY OCM utilizes public blockchain's security and accessibility with data privacy through ZKPs.

ZKPs allow parties to verify the accuracy of information without revealing the information itself. When parties interact with the contract, they can validate its integrity without exposing sensitive details.

This ensures that critical contract terms, transaction details, and value chain confidential information remain shielded, granting enhanced privacy.

Decentralized Operation: The solution runs on the Ethereum public blockchain, ensuring decentralized operation within a trustworthy environment.

API Integration: Enterprises can easily integrate EY OCM into existing systems through a standardized API.

Challenges Addressed by EY OCM

Multi-Party Contracts: EY OCM tackles the challenge of managing business agreements that span internal and external operational and technology silos.

Value Fragmentation: By aggregating spend across systems and business partners, smart contracts prevent value fragmentation, making it easier to track and qualify for discounts and rebates.

Use Cases

Power Purchasing Agreements (PPAs): Initial test users are implementing complex PPAs that include market prices and strike prices with minimum and maximum purchase criteria.

According to Zion Market Research, the global smart contracts market is projected to reach $1 billion by 2030, with a compound annual growth rate (CAGR) of approximately 24% between 2023 and 2030.

EY (Ernst & Young) is actively involved in developing various blockchain solutions to address business challenges and enhance efficiency. Some of the notable EY blockchain solutions include — EY Blockchain Analyzer (Smart Contract/ Token Review and Tax Calculator), EY OpsChain Traceability (for traceability and transparency across supply chains by leveraging notarization and tokenization), EY OpsChain Public Finance Manager, and EY Blockchain Analyzer: Reconcile.

The Big-4 Accounting Firms Admitted to Violating Rules on Audit Independence Hundreds of Times

The so called "Big Four" accounting firms —Deloitte, PwC (PricewaterhouseCoopers), EY (Ernst & Young), and KPMG — have admitted hundreds of violations of regulations designed to protect the independence of their audit work, reported the Financial Times (FT).

This information comes after the introduction of new disclosure rules in the US by the Public Company Accounting Oversight Board (PCAOB), an audit inspector of the US established by Congress to oversee the audits of public companies.

The FT report said that confessions by the Big-4s come as the PCAOB urges companies and investors to pay greater attention to the findings of its annual inspections of audit firms, the latest round of which are expected to be released in the coming weeks.

US regulators require audit firm staff and their immediate family to make thorough financial disclosures, for example of their investments, and they ban employment and financial relationships with audit clients that could impair the firm's independence.

Under the disclosure, PwC said that it had identified 129 breaches of independence rules affecting 74 clients and PCAOB inspectors had found a further one themselves while inspecting audit work in 2022. The figures were included in an update to PwC's audit quality report, published on its website.

Citing a person familiar with the situation at PwC, the FT report said, "one example was the spouse of a staffer (PwC) holding a cash balance on payments app Venmo while PwC was auditing Venmo's parent company PayPal.

Notably, PwC affiliates served as independent auditors of Satyam Computer Services when the report of scandal in the account books of Satyam Computer Services broke. Satyam was an IT services company that once had Fortune-500 clientele, which later merged with Tech Mahindra.

Deloitte had told PCAOB inspectors of 129 breaches across 78 clients in 2022 affecting approximately 3% of its US audits and 107 across 53 clients in the 2023 inspection cycle.

According to the Deloitte, the most common instances of non-compliance were "related to financial relationships and employment relationships of approximately 145,000 professionals monitored".

"I would characterise them as technical violations," said Dennis McGowan, vice-president of the Center for Audit Quality, Deloitte.

In June 2023, Deloitte resigned from India's Byju's statutory auditor midway saying that the financial statement of the edtech company for FY22 was long delayed.

EY disclosed that it had found independence violations affecting 3% of its audits in 2022.

KPMG is the only Big-Four firm not to have disclosed its figures, which will become public in the PCAOB's forthcoming inspection reports for 2022. The PCAOB decided last year to begin routinely including data on independence violations.

Big Four audit clients are what arguably make the largest audit companies in the world worth working for. A staggering 100% of the Fortune 500 are audited by one of the Big Four accounting firms.

Early this month, India's National Financial Reporting Authority (NFRA) has also started investigating audit and non-audit services provided by the Big Four and other firms to clients. NFRA had raised concerns about conflict of interest and independence issues, leading to disciplinary actions. Violations include exceeding the revenue limit for non-audit services and breaching the cap on revenue from a single client.

PE/VC Investments At Record High of $8.7 Billion in Jul-Sep

In what could be considered as an excellent news coming in for the Indian startup industry, private equity/venture capital (PE/VC) investments in the ecosystem reached a whopping $8.7 billion in the September quarter, a figure which is significantly higher than what was recorded for the same period last year.

According to a report by research company Ernst and Young (EY), the sector saw its PE/VC investments for the quarter July-September increase from $3.1 billion in the same period last year to a record high $8.7 billion this year. The report highlighted that this sharp increase was largely courtesy the big-ticket transactions that took place over the said period.

In total, the ecosystem witnessed a total of nine $200-million-plus deals in the July-September 2017 quarter, with SoftBank’s $2.5 billion investment in Indian ecommerce giant Flipkart being the largest PE investment ever recorded in the Indian subcontinent.

In August, Flipkart raised the second portion of its Series J funding from SoftBank Group. The $2.5B investment by the Japanese telecom and internet giant was a part of its $93 billion Vision Tech Fund, which is considered as the world's biggest private equity fund.

The EY report further revealed that not only did PE/VC investments saw a sharp jump in the July-September quarter, but the period also saw record exits for PE players and the largest IPO exits ever recorded in the history of Indian startup ecosystem.

According to the report, exists registered on a year-on-year basis saw an increase of a staggering 128 per cent in value terms at $4.7 billion across 65 deals. The EY report noted that this number was largely driven by exits via open market, secondary sale and IPOs.

The quarter also recorded the largest IPO exits ever with Fairfax selling its 12 per cent stake in ICICI Lombard for a celebratory $558 million.

Speaking to PTI, Vivek Soni, partner and leader for PE Advisory, EY said, “India is clearly maturing as a PE market, with bigger and complex deals becoming more common. Greater numbers of large deals and buyouts support this thesis, and it is clearly visible in the third quarter 2017 investment numbers.”

Commenting on the increase in the number of IPO exits and exits of PE players, Soni added, "The good news is that there is a massive amount of dry powder available globally and most global funds are now keenly looking at India for investment opportunities. The compulsion of corporate India to deleverage by selling assets is expected to add momentum to the growth of buyout deals in India.”

In August, another EY report had highlighted PE/VC investments in the Indian subcontinent had reached a record USD 11.2 billion in the first half of this calendar year. This meant, the country witnessed a whopping 41 per cent increase over last year driven by some big ticket deals.

This development was first reported in Business Standard.

PE/VC Investments At Record High of $8.7 Billion in Jul-Sep

In what could be considered as an excellent news coming in for the Indian startup industry, private equity/venture capital (PE/VC) investments in the ecosystem reached a whopping $8.7 billion in the September quarter, a figure which is significantly higher than what was recorded for the same period last year.

According to a report by research company Ernst and Young (EY), the sector saw its PE/VC investments for the quarter July-September increase from $3.1 billion in the same period last year to a record high $8.7 billion this year. The report highlighted that this sharp increase was largely courtesy the big-ticket transactions that took place over the said period.

In total, the ecosystem witnessed a total of nine $200-million-plus deals in the July-September 2017 quarter, with SoftBank’s $2.5 billion investment in Indian ecommerce giant Flipkart being the largest PE investment ever recorded in the Indian subcontinent.

In August, Flipkart raised the second portion of its Series J funding from SoftBank Group. The $2.5B investment by the Japanese telecom and internet giant was a part of its $93 billion Vision Tech Fund, which is considered as the world's biggest private equity fund.

The EY report further revealed that not only did PE/VC investments saw a sharp jump in the July-September quarter, but the period also saw record exits for PE players and the largest IPO exits ever recorded in the history of Indian startup ecosystem.

According to the report, exists registered on a year-on-year basis saw an increase of a staggering 128 per cent in value terms at $4.7 billion across 65 deals. The EY report noted that this number was largely driven by exits via open market, secondary sale and IPOs.

The quarter also recorded the largest IPO exits ever with Fairfax selling its 12 per cent stake in ICICI Lombard for a celebratory $558 million.

Speaking to PTI, Vivek Soni, partner and leader for PE Advisory, EY said, “India is clearly maturing as a PE market, with bigger and complex deals becoming more common. Greater numbers of large deals and buyouts support this thesis, and it is clearly visible in the third quarter 2017 investment numbers.”

Commenting on the increase in the number of IPO exits and exits of PE players, Soni added, "The good news is that there is a massive amount of dry powder available globally and most global funds are now keenly looking at India for investment opportunities. The compulsion of corporate India to deleverage by selling assets is expected to add momentum to the growth of buyout deals in India.”

In August, another EY report had highlighted PE/VC investments in the Indian subcontinent had reached a record USD 11.2 billion in the first half of this calendar year. This meant, the country witnessed a whopping 41 per cent increase over last year driven by some big ticket deals.

This development was first reported in Business Standard.