Systemizing the Challenges of Auditing Blockchain-Based Assets
Pimentel, E., Boulianne, E., Eskandari, S. & Clark, J. (2020) Systematizing the Challenges of Blockchain-Based Assets. Journal of Information Systems. Forthcoming. https://doi.org/10.2308/ISYS-19-007
45 Pages Posted: 2 May 2019 Last revised: 8 Oct 2020
Date Written: October 1, 2020
Presently, auditing firms are hesitant to accept mandates from companies that hold a significant amount of cryptoassets, primarily because the blockchain sector introduces novel, technically sophisticated and risky propositions that auditors are unequipped to handle. Abrupt recusals by auditors operating in this sector have led to several enterprises being placed on cease trade by securities regulators for failure to produce audited financial statements on time, thus impeding these companies from raising capital and bringing new investment to fund innovation in this space. Through an iterative process of interviews with senior accounting professionals, structured brainstorming among a multidisciplinary team of accountants and blockchain experts, and a focus group with experienced auditors, we critically analyze the purported roadblocks to auditing blockchain firms and map them to traditional auditing practices. We urge auditors to reconsider their resistance to the blockchain sector by demonstrating that providing an audit opinion is challenging but not insurmountable.
Keywords: Blockchain, Financial Audit, Cryptoassets, Accounting Firms, Auditors, Cryptocurrencies
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