Agenda

1. About KPMG Japan Digital Audit
2. case and solution
3. next step

About KPMG Japan Digital Audit

KPMG AZSA LLC

• As a member firm of KPMG, KPMG AZSA & Co. provides valuable audit and advisory services to clients and society with complex issues.
• Recently, smart contract audit services document collation and transaction transactions have been digitized, and digitization is also progressing in the field of auditing.
• Combining KPMG’s audit knowledge and technology to increase added value

3C x I

Comprehensive Audit

• Comprehensively audit the books to be audited using scrutinizing indicators
• Instead of sampling and auditing only a portion of the data, which was traditionally done manually, it is now performed on the entire population.

Centralized Audit

• Audit platform for effective and efficient analysis of large amounts of data

Continuous Audit

• Audits that were traditionally conducted at the time of yearly settlement of accounts are now being conducted in real time to constantly follow the data.
• Respond quickly to changes in the business environment and management conditions

Insights

• Extensive knowledge of KPMG original audits

Future of Audit

• Two days of events at an audit site in 2025
• Depicting the future audit site where Continuous Audit is realized
• Production: KPMG UK

KPMG Ignition Tokyo

• About 120 digital human resources group
• Developed a digital platform that can be shared by KPMG Japan’s audit, tax, and advisory operations
• 6 technical areas to focus on

Secure Computing

• A general term for technology that unifies information groups handled by KPMG, such as audit information, tax information, and advisory information, and enables them to be processed in a safer manner.

Knowledge Processing

• Extracting, recognizing, and creating a database of information from unstructured data such as images, text, and voice
• Acquire semantic value in line with human knowledge and senses by connecting aggregated structural data

Intelligent Agent

• An agent with intellectual senses that enables natural dialogue with humans based on aggregated information knowledge in a specific field

Scientific Visualization

• Effective visual, smart contract audit, auditory, and tactile feedback techniques
• Data analysis and graphing technology including Business Intelligence tools

Smart Transaction

• Detect anomalies undetectable by humans, detect intentional and malicious processing
• Expected to contribute to the core of KPMG’s operations

Edge Computing & IoT

• Real-time data capture technology centered on IoT and next-generation computing technology for high-speed processing

Infrastructure that supports technology domains

• Cloud
• DevOps
• Security

case and solution

• Virtual currency analysis tool (patent pending) development background and requirements
• In the audit, it became necessary to analyze transactions throughout the year and verify the balance at the end of the year for virtual currencies.
• The number of cases where clients hold a large amount of assets in virtual currency is increasing

requirement

• Multiple currencies audited
• Some currencies have millions of audited addresses
• Mainly Bitcoin
• Data for one accounting period (one year) is sufficient for transaction analysis
• Regarding balance verification, the concept of balance at the end of the previous term does not exist in virtual currency
• It is necessary to calculate by accumulating data from genesis to the end of the period
• It is necessary to ensure the reliability, accuracy and completeness of the information handled in the audit

Why you shouldn’t use external explorer sites

• The address to be audited is confidential and cannot be passed to an external explorer.
• Audits need to assess the reliability of information sources
• Although the source code of the external explorer is open to the public, the operational management status of the backend is not open to the public, and its reliability cannot be evaluated.

Reasons why you can’t operate an Explorer site in-house

• In some cases, there are millions of addresses to be audited, so it is practically difficult to handle with Explorer, which has only a web interface.
• Very few Explorers have the ability to display the balance at a specific point in the past
• Audits require period-end data
• There are many ways to display results (HTML, JSON, etc.), and changing the verification method for each explorer puts a heavy burden on the auditor. bsc smart contract audit

Initial system configuration

• Common monolithic system configuration
• Each currency node has an API, through which the information necessary for auditing (mainly blocks and transactions) is acquired in JSON format and processed into an easy-to-analyze format.
• Issues during development
• Initially, the project was thought to be finished in 2–3 months, but once it started, problems erupted.
• Currency node operational cost challenges
• Issues in system operation
• Lack of understanding of currency specifications
• Issues in data processing

Currency node operational cost challenges

• Task
• High operating costs for storage
• SSD requested as node storage
• There is a currency with a capacity of TB class
• The cost of running an instance is also high.
• Node instance also requires at least Large-class machine power