The AICPA has updated last year’s guidance on auditing digital assets.
The new material, contained in Accounting for and Auditing of Digital Assets, is based on professional literature and experience from members of the AICPA Digital Assets Working Group and AICPA staff, and is specific to U.S. generally accepted auditing standards (GAAS). Digital assets are digital records on a distributed ledger that use cryptography for verification and security.
“This non-authoritative guidance goes a long way in helping auditors consider the potential risks unique to the digital assets ecosystem and the skillsets needed to conclude whether to accept or continue an engagement,” says Susan S. Coffey, AICPA executive vice president.
The practice aid provides auditors with information to consider when accepting or continuing audit engagements that involve digital assets. CPA firms should assess:
- The current industry expertise and understanding of digital assets.
- Management’s competencies and capabilities to maintain the entity’s books and records and secure its assets.
- The client’s integrity and commitment to compliance with laws and regulations and its overall business strategy and the role the entity serves or intends to serve within the digital assets ecosystem.
“Overconfidence in the digital assets ecosystem is a real risk,” says Amy Steele, chair of Digital Assets Working Group. Steele is also an audit and assurance partner at Deloitte & Touche. “This Practice Aid is a great step at highlighting some of the unique challenges and considerations for auditors seeking to perform audits in this ecosystem.”