The American Institute of CPAs has updated its practice aid on digital assets with a new chapter on auditing cryptocurrency lending and borrowing transactions.
The new chapter in the Digital Assets Practice Aid includes examples of audit procedures to help identify and respond to potential misstatements in financial reporting involving these crypto lending and borrowing transactions.
The practice aid contains nonauthoritative guidance on how to account for and audit digital assets. The new chapter walks through two typical scenarios:
When a borrower of a crypto intangible asset is not required to post collateral; andWhen a borrower is required to post collateral.
In each case, the practice aid describes sample audit procedures from the lender’s perspective and the borrower’s perspective, giving auditors practical strategies for their own engagements.
Auditors may have to adapt or combine procedures to get enough reliable evidence to comply 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,” said Di Krupica, senior manager of digital assets, assurance and advisory innovation at the AICPA, in a statement Wednesday. “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.”
