Systemizing the Challenges of Auditing Blockchain-Based Assets

33 Pages Posted: 2 May 2019

See all articles by Erica Pimentel

Erica Pimentel

Concordia University, John Molson School of Business, Department of Accountancy

Emilio Boulianne

Concordia University, Quebec - John Molson School of Business

Shayan Eskandari

Concordia University, Quebec - Gina Cody School of Engineering and Computer Science

Jeremy Clark

Concordia University, Quebec - Gina Cody School of Engineering and Computer Science

Date Written: March 21, 2019

Abstract

Firms transacting using blockchain-based assets and liabilities have begun to enter capital markets in search for funding. Historically, firms have been able to raise substantial funding without an audited financial statement, however we project that in the future, audits will become a common requirement given increased competition among firms, increased scrutiny from regulators, past instances of fraud, and firms seeking an IPO. At the time of writing, accounting firms are hesitant to accept mandates from companies that hold a significant amount of cryptoassets primarily because the blockchain market introduces novel, technically sophisticated, and risky propositions that auditors are unequipped to handle. Through interviews with senior accounting professionals and structured brainstorming meetings with a multidisciplinary team of accountants and blockchain experts, we critically analyze the purported roadblocks to auditing blockchain firms and map them to traditional auditing practices, demonstrating that providing an audit opinion is challenging but not insurmountable.

Keywords: Blockchain, Financial Audit, Cryptoassets, Accounting Firms, Auditors, Cryptocurrencies

Suggested Citation

Pimentel, Erica and Boulianne, Emilio and Eskandari, Shayan and Clark, Jeremy, Systemizing the Challenges of Auditing Blockchain-Based Assets (March 21, 2019). Available at SSRN: https://ssrn.com/abstract=3359985 or http://dx.doi.org/10.2139/ssrn.3359985

Erica Pimentel (Contact Author)

Concordia University, John Molson School of Business, Department of Accountancy ( email )

1455 de Maisonneuve Blvd. W.
Montreal, Quebec H3G 1M8
Canada

Emilio Boulianne

Concordia University, Quebec - John Molson School of Business ( email )

1455 de Maisonneuve Blvd. W.
Montreal, Quebec H3G 1M8
Canada

Shayan Eskandari

Concordia University, Quebec - Gina Cody School of Engineering and Computer Science ( email )

1515 Ste. Catherine St. West
EV 002.139
Montreal, Quebec H3G 1M8
Canada

Jeremy Clark

Concordia University, Quebec - Gina Cody School of Engineering and Computer Science ( email )

1515 Ste. Catherine St. West
EV 002.139
Montreal, Quebec H3G 1M8
Canada

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