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

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: October 1, 2020

Abstract

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

Suggested Citation

Pimentel, Erica and Boulianne, Emilio and Eskandari, Shayan and Clark, Jeremy, Systemizing the Challenges of Auditing Blockchain-Based Assets (October 1, 2020). 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 , 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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