The AICPA said Sept. 3 that it has added a new chapter to its digital assets practice aid that gives practitioners practical guidance for auditing crypto lending and borrowing transactions.
The guidance in the new chapter reflects the rapid growth of crypto markets and the need for auditors to address the risks that come with them, the AICPA stated.
The updated practice aid, Accounting for and Auditing of Digital Assets, is now available for members to download from the AICPA website.
The new guidance offers real-world examples of audit procedures that can help auditors identify and respond to potential misstatements in financial reporting involving these types of digital asset transactions.
The chapter walks through two common scenarios:
- When a borrower of a crypto intangible asset is not required to post collateral, and
- When a borrower is required to post collateral.
For each case, the practice aid provides sample audit procedures from both the lender’s perspective and the borrower’s perspective, giving auditors practical strategies they can apply to their own engagements, the AICPA said.
The new chapter provides sample audit procedures for crypto lending and borrowing, some similar to those for traditional lending. They’re not exhaustive, the AICPA noted, and auditors may need to adapt or combine procedures to gather sufficient, reliable evidence in line with AU-C Section 500, Audit Evidence, and other applicable standards.
“Auditing crypto lending and borrowing transactions can be complicated, and until now auditors have operated with a minimal amount of clear guidance,” Di Krupica, senior manager of digital assets, assurance, and advisory innovation at the AICPA, said in a statement. “This new resource is designed to make it easier for auditors to do their jobs effectively and help promote transparency for investors, companies, and the broader public.”
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Tags: accountants, Accounting, AICPA, Auditing, auditors, cryptocurrency, digital assets
