Accounting and Auditing of Cryptographic Assets

Abstract

This thesis presents the first comprehensive empirical investigation into how accounting and auditing professionals navigate the practical challenges of cryptoasset reporting in an era of regulatory fragmentation. Through systematic literature analysis across accounting standards, taxation frameworks, and auditing practices, combined with in-depth interviews with seven practitioners from Big Four firms to specialized fund administrators, this research bridges the critical gap between theoretical predictions and professional reality. The study reveals three key findings that validate theoretical concerns while uncovering unexpected complexities. First, practitioners face unprecedented valuation challenges due to cryptoasset volatility requiring precision timing where "misstating even a few hours can materially change reported values," forcing professionals to develop redundant verification systems using multiple pricing sources and blockchain analytics tools. Second, enhanced due diligence and compliance verification have emerged as the dominant audit challenges, fundamentally reshaping professional priorities and procedures across all firm sizes in ways academic literature had not anticipated. Third, regulatory fragmentation between IFRS, US GAAP, and national frameworks creates measurable operational inefficiencies, with practitioners reporting significant increases in audit time and requiring dual reporting systems to satisfy varying jurisdictional requirements. The research exposes concerning disparities in professional capabilities, where Big Four firms demonstrate sophisticated blockchain verification and multidisciplinary teams while smaller firms struggle with basic procedures, suggesting potential audit quality bifurcation. Most critically, the study identifies custodian standardization as the primary infrastructure gap limiting effective crypto practice, with practitioners noting "every custodian has its own way of reporting, and there's no standardization." These findings demonstrate that cryptoasset challenges represent fundamental questions about professional adaptation to technological disruption. The thesis provides evidence-based recommendations for coordinated international standards development, enhanced professional training, and systematic technology integration essential for maintaining audit quality and financial reporting reliability in an increasingly digital economy. The research establishes foundations for strategic decisions that will shape professional practice for decades to come.