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The Auditchain project is a complex and comprehensive project within the financial auditing industry which is not easily understood by outsiders. Below follows a very simplified and �ELI5� (explain like I am 5) explanation. Many questions are answered in the whitepaper, so please read it carefully and multiple times!
Current Status of Traditional Assurance
An audit is, simply speaking, an opinion based on inspection of the operational and financial state of a company. Audits are needed to express to shareholders or people with an interest in the company, that financially speaking, the company is telling the truth �in all material respects�. This means that the information that the auditor expresses an opinion on �presents fairly� in all material respects, the financial and operating condition of the enterprise. That statement, as stated in every annual report carries a high degree of subjectivity and is conditional upon a lot of other things, such as the management�s ability to maintain control over disclosure controls. Auditors are tasked with expressing a set of opinions, not facts. However, there are three critical flaws to this system:
1) the Auditor is giving an opinion, which is subject to bias and can be influenced by the company.
2) the evidence that is provided to the Auditor comes from the company itself, usually once a quarter an on an annual basis. This gives the company enough time to alter the evidence in their favor.
3) IT IS NOT THE AUDITORS JOB TO SPECIFICALLY DETECT FRAUD. That is a different kind of an audit.
Why is this important?
The most obvious reason is to maintain integrity. In 2018 alone, fraud resulted in the theft of over $7 Billion according to the ACFE. You can read the most recent Report to the Nations. Read the report. https://s3-us-west-2.amazonaws.com/acfepublic/2018-report-to-the-nations.pdf However, there is another important reason to change this process. As the world has become more connected and services are available 24/7, the financial state of companies should also be available 24/7 for investors and shareholders. Investors, hedge funds, VCs and fund managers should be able to check the status of their investment in a company or entity at any time, whether the company raised their funds through ICO, IEO or in traditional ways. DIGITAL ASSETS NEED REAL TIME ASSURANCE AND DISCLOSURE! ITS UP TO EXCHANGES TO REQUIRE IT!
The Solution – Auditchain
The DCARPE Assurance and Disclosure Platform will enable continuous enterprise state machine and real time financial performance external validation by a network of CPAs and Chartered Accountants for issuers of digital assets. The DCARPE Explorer will render real time financial statement data as well as audit analytics in REAL TIME. The DCARPE Explorer will also offer public subscriptions to deeper financial detail and audit analytics as well as the ability to access tools to build dynamically updating thesis-based reports that ultimately have the potential to mechanize the foresight of oncoming risk.
This solves the two flaws in the current auditing system:
1) The auditors running the nodes are not connected to the company. They are truly independent.
2) The company must adapt their systems to provide cryptographically verifiable data in real time, which removes the time lapse and attack vectors from data delivery to the external validating nodes.
Please review our whitepaper for a full overview of the ecosystem Auditchain is building.
Staking Incentives and Rewards
All external validators and service providers such as software providers are required to purchase and stake AUDT. Enterprises stake AUDT to pay for services and assurance. Software providers that provide accounting and human resource software must stake AUDT. They get paid AUDT for providing the software to enterprise users. Auditors must also stake AUDT. They also get paid AUDT for providing attestations on each data block. They also get charged for not providing assurance when it is appropriate. This promotes and enforces a healthy gamified environment.
Auditchain is secured through Proof of Stake (PoS) consensus mechanism. 85% of the rewards are distributed to the external validators and 15% is distributed to Auditchain and DCARPE Alliance, its affiliate for development of the network and education.
Please refer to the whitepaper for more technical details regarding �Network and Consensus Governance�
The DCARPE� Alliance is a global coalition of members of the accounting, audit, financial reporting, legal, blockchain, investment and regulatory community, (the �Alliance�). The purpose of the Alliance is to provide education, drive technology innovation and open source engineering, and promote the adoption of continuous audit and real time financial reporting using the DCARPE� Assurance and Disclosure Protocol.
Auditchain is the founding member of the Alliance and is leading the development of DCAPRE with other members of the Alliance in the technical category. The DCARPE Assurance and Disclosure Protocol is the world�s first decentralized continuous audit and financial reporting protocol ecosystem for digital asset assurance and disclosure.
The Alliance is segmented in four categories;
� Financial Reporting & Assurance � CPAs, Chartered Accountants Individual and Corporate Experts in Active Practice
� Technical � Developers and Third-Party Software Providers
� Legal and Regulatory – Law Firms, Regulators, Academics
� Gatekeepers � Digital Asset Exchanges, Securitization and Tokenization Platforms
Members in the assurance and financial reporting category of the Alliance will act as service providers in the DCARPE ecosystem. The Alliance members include Certified Public Accountants and Chartered Accountants who are system and organizational control auditors as well as financial statement auditors. They will operate external validating (�audit�) nodes on the network. This is the Assurance and Reporting category.
Members in the technical category of the Alliance are developers, enterprise software, technology and systems integration will act as service providers by adapting and integrating instances of their software into DCARPE for consumption and utilization by enterprises. This is the technical membership category.
Members from the legal, regulatory and academic community provide thought leadership on the benefits of continuous assurance and real time financial disclosure as well as how it can shape the evolution of existing legislature. This category represents the thought leadership category.
Members who provide digital asset origination, distribution, listing and trading services are the gatekeepers. They are tokenization and securitization platforms as well as digital asset exchanges.
There are currently 50 members of the DCARPE� Alliance. The contributing members are companies who are global leaders in providing financial reporting software products and related services, XBRL software, accounting software APIs, Blockchain, artificial intelligence and machine learning software and consulting services.
The remaining members are CPAs, Chartered Accountants and acad
emic thought leaders in accounting, audit and financial reporting.
Why Auditchian Adoption?
Digital Assets Need Real Time Transparency. It�s Up to Exchanges to Require It. Unless digital asset exchanges begin to demonstrate improvements in listing standards, risk controls and transparency, regulatory compliance and mass adoption will be extremely difficult.
Traditional exchanges such as Deutsche Borse, NYSE, NASDAQ and SIX have strict listing standards that require all assets to submit to audit and review. Every traditional exchange also submits to audit and review. Failure to report financial results on time is cause for regulatory enforcement action and �delisting�.
We believe that digital asset exchanges have another chance to remain innovative and set an example for the global financial system by creating a new listing category reserved for digital asset listings and IEOs that agree to provide real time financial transparency subject to continuous external validation assurance by adopting DCARPE.
Auditchain is partnering with digital asset exchanges who will act as early adopters to integrate DCARPE via API into their digital asset exchange listing and launchpad platforms. It�s a strategic move by digital asset exchanges to collaborate and demonstrate innovation and advancements in disclosure and transparency. It is also the key to avoid being shut down by governments and regulators for failing to protect investors and otherwise failing to promote and enforce, market integrity and full and fair disclosure.
Blockchain in its essence is an accounting system. It is the best use case for a blockchain. It is a distributed ledger of records that are protected by cryptographic hashes, which cannot be changed once it is on the blockchain. This makes it perfectly suited for transparent, immutable financial records.
Based on much research, we believe we have a first mover advantage. We also believe that based on much research, there are no other projects that are building a decentralized continuous audit and financial reporting protocol.
Here is demo video of the DCARPE Explorer; https://auditchain.com/dcarpe-explorer-front-end-demo-first-series/
The team can be viewed on our website which contains the most current information. Please visit https://auditchain.com
Token Generation Event and Token Metrics
Auditchain will be conducting a token generation event, (�TGE�) of a total of 250,000,000 AUDT which will initially be launched on the Ethereum network through the deployment of an ERC20 smart contract.
A total of up to 100,000,000 AUDT will be sold to early adopters, 45,000,000 will be allocated for the �Proof of HODL� Airdrop, 25,833,333 will be allocated to the team, up to 25,833,333 will be allocated to advisers, up to 25,833,333 will be allocated in connection with partnerships, 15,000,000 will be allocated to early adopters and up to 12,500,000 will be allocated in connection with our bounty campaign.
AUDT will used by subscribers to consume granulated levels of financial detail and audit analytics published by enterprise adopters of the DCARPE� Assurance and Disclosure Protocol through the DCARPE� Explorer.
In addition to the initial AUDT token supply and subject to block times, consensus proposals and improvements, approximately 12,500,000 additional AUDT tokens will be rewarded to all Federated and Non-Federated nodes per year which amounts to approximately 237 AUDT tokens per block depending on block times.
Initial Exchange Offering
The first phase will begin on ExMarkets on June 14, 2019. This thread will be updated with additional exchange IEO listings. See the official announcement here. https://medium.com/@Auditchain/auditchain-and-exmarkets-partner-to-integrate-dcarpe-assurance-and-disclosure-protocol-for-digital-993558b05235
Auditchain will be entering into partnerships with other exchanges to conduct initial exchange offerings, (�IEO�). We will conduct a total of three phases of our IEO.
We are only choosing exchanges who agree join the DCARPE Alliance and partner with us by integrating the DCARPE Assurance and Disclosure Protocol into the exchange, create a separate listing category for digital assets that provide externally validated financial disclosure using the DCARPE Assurance and Disclosure Protocol.
ONLY 1,000,000 AUDT WILL BE SOLD IN THIS PHASE!
Price: $0.20 USD
Tokens for sale: 1,000,000
Blockchain: Ethereum: (ERC20)
Currency pairs: BTC, ETH, USDC, EUR
Restricted countries: United States of America, Afghanistan, Cuba, Iran, Iraq, Libya, N. Korea, Syria, Myanmar, China, Haiti, Liberia, Rwanda, Somalia, Sudan, or the Democratic Republic of the Congo
�Proof of HODL� Airdrop
Auditchain intends to make four (4) airdrops to early adopters of up to a total of 45,000,000 AUDT following the last phase of its IEO. The Airdrop will occur pursuant to the following eligibility conditions; (i) Wallet addresses must contain a balance of AUDT Tokens at the time of the snapshot, (ii) the balance of AUDT Tokens contained in each wallet address must be identical in state to the snapshot for each of the consecutive blocks following the snapshot with one exception; AUDT Token balances may be increased between the snapshot and the Airdrop but never decreased. In order to meet eligibility requirements, no AUDT may be moved out or transferred from a wallet address at any time between each snapshot and each Airdrop.
Airdrop Distribution Schedule
Each Airdrop will be distributed to eligible wallets which will receive an allocation of AUDT proportionate to their stake in the total amount of AUDT held by eligible wallets. This will be calculated using the following formula:
Airdrop Amount X Number of AUDT Held/Total Number of Eligible AUDT Held=Airdrop Allocation
Auditchian Partners with Rymedi – NASDAQ – https://www.nasdaq.com/press-release/auditchain-partners-with-rymedi-to-launch-dcarpe-assurance-and-disclosure-platform–20190418-00886
Auditchain Partners with Monax � Yahoo Finance – https://finance.yahoo.com/news/auditchain-partners-monax-integrate-dynamic-135000163.html
Pepper Hamilton LLP Joins DCARPE Alliance � Pepper Hamilton – https://www.pepperlaw.com/news/pepper-hamilton-joins-dcarpe-alliance-2019-05-16/
Gilded Joins DCARPE Alliance � Irish Tech Times – https://irishtechnews.ie/dcarpe-alliance-integrate-with-gilded-finance/
BANKEX Joins DCARPE Alliance, Partners with Auditchain – Medium – https://medium.com/@Auditchain/bankex-joins-dcarpe-alliance-57e18f374b1d
Shyft Network and Aeternity Join DCARPE Alliance, Partner with Auditchain � Aeternity – https://forum.aeternity.com/t/aeternity-joins-dcarpe-alliance/3677
Please visit our bounty thread here https://bitcointalk.org/index.php?topic=5151587.0