Victor Ugochukwu · Dec 14, 2020 . 5min read
AICPA amends guidelines on how to audit digital assets
Auditors get updated information from AICPA on how to deal with digital assets as a result of the changing landscape due to COVID-19.
By Shilika · Jul 17, 2020 . 5min read
The American Institute of Certified Public Accountants(AICPA) has issued new guidelines on how to audit digital assets. They had initially provided guidelines for the first time last year.
In a press release by AICPA, the latter announced the guidelines laid down in respect to auditing digital assets. The guidance is said to be non-authoritative. However, it will help accountants understand how to address the risks associated with digital assets. Accountants will be well equipped to make decisions while considering an engagement. The AICPA stated that it would aim to update its guidelines along with the changes in the digital assets eco-space. Morever, the AICPA also laid down cautious measures in respect to unique challenges and risks in the financial digital ecosystem.
The new updates comes at a time when ownership of digital assets has been on the rise. Digital assets tend to outperform when there is an economic uncertainty. With the given current economic climate as a result of COVID-19, digital assets are flourishing.
The new guidelines help auditors understand what to consider while deciding to accept or continue audit engagements that involve digital assets. The information is based on professional literature and also on the findings of the AICPA Digital Assets Working Group in accordance with U.S. GAAS(Generally accepted accounting standards)
Auditors must consider the following before deciding to accept or continue an engagement:
- The audit firm’s current industry expertise and understanding of digital assets;
- Management’s competencies and capabilities to maintain the entity’s books, records and secure it’s assets; and
- The client’s integrity and commitment to comply with laws and regulations. It’s overall business strategy and the role the entity serves or intends to serve within the digital assets ecosystem.
In conclusion, the AICPA insists that auditors must be especially careful while dealing with digital assets.
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