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Issues, risks, and challenges for auditing crypto asset transactions

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  • Hsieh, Sheng-Feng
  • Brennan, Gerard

Abstract

Many entities are progressively engaged in crypto asset transactions. The distinct nature of crypto assets from typical financial instruments makes it more challenging for external auditors to provide reasonable assurance on financial statements encompassing material crypto asset activities and transactions. To provide more specific guidance in crypto asset-related audits, this paper aims to (1) identify various participants in the crypto asset ecosystem and illustrate their relationship with the audited entity, (2) identify and elaborate the new challenges and risks for financial statement audits related to the crypto asset ecosystem, and (3) summarize issues to be considered in crypto asset-related audits in an audit framework. The dynamically evolving crypto asset ecosystem not only brings challenges and risks but also new assurance opportunities to the auditing profession after identifying and addressing those critical issues.

Suggested Citation

  • Hsieh, Sheng-Feng & Brennan, Gerard, 2022. "Issues, risks, and challenges for auditing crypto asset transactions," International Journal of Accounting Information Systems, Elsevier, vol. 46(C).
    • Handle: RePEc:eee:ijoais:v:46:y:2022:i:c:s1467089522000215
    DOI: 10.1016/j.accinf.2022.100569
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    References listed on IDEAS

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    1. Sheldon Bennett & Ken Charbonneau & Ryan Leopold & Linda Mezon & Carol Paradine & Anthony Scilipoti & Rebecca Villmann, 2020. "Blockchain and Cryptoassets: Insights from Practice†," Accounting Perspectives, John Wiley & Sons, vol. 19(4), pages 283-302, December.
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    5. Dwyer, Gerald P., 2015. "The economics of Bitcoin and similar private digital currencies," Journal of Financial Stability, Elsevier, vol. 17(C), pages 81-91.
    6. John “Jack” Castonguay & Sean Stein Smith, 2020. "Digital Assets and Blockchain: Hackable, Fraudulent, or Just Misunderstood?†," Accounting Perspectives, John Wiley & Sons, vol. 19(4), pages 363-387, December.
    7. Jesús Calderón & Theophanis C. Stratopoulos, 2020. "What Accountants Need to Know about Blockchain," Accounting Perspectives, John Wiley & Sons, vol. 19(4), pages 303-323, December.
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    Cited by:

    1. Fábio Albuquerque & Paula Gomes Dos Santos, 2023. "Recent Trends in Accounting and Information System Research: A Literature Review Using Textual Analysis Tools," FinTech, MDPI, vol. 2(2), pages 1-27, April.
    2. Voicu D. Dragomir & Valentin Florentin Dumitru, 2023. "Recognition and Measurement of Crypto-Assets from the Perspective of Retail Holders," FinTech, MDPI, vol. 2(3), pages 1-17, August.

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    More about this item

    Keywords

    Crypto asset; Audit framework; Auditing; Blockchain;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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