One of the ‘Big Four’ accounting companies worldwide, Ernst & Young (EY), has acquired several cryptocurrency assets and their relevant patents in a bid to attract new clients. The US-based company bought part of the business of crypto startup Elevated Consciousness, EY said on July 19.
The most important asset in the deal is the Andy Crypto-Asset Accounting and Tax (CAAT) tool, which makes connections between multiple cryptocurrency exchanges and wallets, allowing better visibility into transactions and inventory. Ernst & Young plans to integrate CAAT into its Blockchain Analyzer portfolio.
“Cryptocurrencies and blockchain are transformational forces with a strong potential to fundamentally change the way business is done,” Kate Barton, EY Global vice chair – Tax Services said.
Ernst & Young made the purchase through its US subsidiary EY LLP and its EY Americas Tax Innovation Foundry division. The CAAT tool aims to widen the company client base as it will offer more certainty and flexibility for cryptocurrency companies by analyzing the time, the character and the source of digital coin generated incomes.
“By allowing taxpayers to model different potential outcomes, they are better able to assess their risk related to reporting taxable income for this new asset class,” Michael Meisler, Ernst & Young LLP Tax partner and Tax Blockchain leader explained in a statement.
In April this year, EY announced a pilot for companies that use the distributed ledger technology (DLT). Called Blockchain Analyzer, the service is an audit technology that tests blockchain assets, liabilities, equity and smart contracts as the crypto market continues to grow on a global level.
Last week, all of the ‘Big Four’ largest auditing firms, Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers (PwC) agreed to join a consortium of 20 Taiwanese banks to pilot-test a blockchain service for auditing interim financial reports of public companies.