Issue: № 5, 2025
Doi: https://doi.org/10.37634/efp.2025.5.19
Introduction. The paper is devoted to the scientific and practical substantiation of the basic procedures for auditing the financial statements of a centralized cryptocurrency exchange. Traditional International Standards on Auditing (ISA) are not fully equipped to handle issues such as cryptographic custody, 24/7 market activity, pseudonymous blockchain identifiers, and fragmented regulatory regimes. As a result, audit procedures must evolve to address valuation risks, custody verification, transaction traceability, and reserve confirmation. The purpose of the paper is to develop a technological audit sequence tailored to the operations of centralized exchanges, combining classical audit planning, control evaluation, and substantive testing with blockchain-native techniques like on-chain verification and cryptographic proofs. Results. The paper systematizes the features of audit planning in the digital asset environment, which combines continuous global trade, cryptographic verification mechanisms and a dynamic regulatory landscape A risk-based approach is proposed, which includes an assessment of market volatility, cybersecurity threats, regulatory and jurisdictional requirements for AML/KYC, as well as the risks of storing assets in hot and cold wallets. The algorithm for integrating continuous audit and blockchain analytics is substantiated for operational tracking of high-risk transactions and confirmation of reserves is revealed. A methodology for the combined use of on-chain verification and external depository confirmations is proposed, which increases the reliability of the evidence base and reduces the risk of collusion between the entity and third parties. The procedures essentially describe in detail the random verification of transactions using automated data analysis, confirmation of control over wallets by cryptographic signature of an arbitrary string and a test minimum transaction, as well as the procedure for reconciling internal order books with blockchain records to ensure that transactions are correctly attributed to the reporting period. Conclusion. By integrating ISA-compliant procedures with cryptographic tools and real-time analytics, the model enhances the credibility of audit conclusions and provides a roadmap for standardizing assurance practices in digital asset markets, contributing to investor trust and regulatory compliance in an evolving financial ecosystem.
Keywords : cryptocurrency audit, asset confirmation, blockchain analytics, audit risks, materiality, control testing, transaction verification, financial statements
References:
1. Nakamoto, S. Bitcoin: A Peer-to-Peer Electronic Cash System. 2008. URL: https://bitcoin.org/bitcoin.pdf
2. PwC. Crypto assets guide. 2023. URL: https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/crypto-assets-guide/assets/pwccryptoassetsguide1223.pdf
3. Financial Action Task Force (FATF). Updated Guidance for a Risk-Based Approach to Virtual Assets and VASPs. 2021. URL: https://www.fatf-gafi.org/content/dam/fatf-gafi/guidance/Updated-Guidance-VA-VASP.pdf.coredownload.inline.pdf
4. EY. Applying IFRS: Accounting by holders of crypto assets. 2021. URL: https://www.ey.com/content/dam/ey-unified-site/ey-com/en-gl/technical/financial-services/documents/ey-apply-ifrs-crypto-assets-update-october2021.pdf
5. IFRS Foundation. Accounting for and Disclosure of Crypto Assets. 2023. URL: https://www.ifrs.org/content/dam/ifrs/meetings/2023/september/fasb-iasb/ap38-crypto-fasb-iasb-education-meeting-september-2023.pdf
6. ISACA. Methods and Techniques of Blockchain Security for IT Auditors. 2021. URL: https://engage.isaca.org/muscatchapter/viewdocument/virtual-webinar-7-2021-methods?CommunityKey=572c27d0-2218-42ec-9260-d7574b3be1e1&tab=librarydocuments
7. KPMG. Investing in Digital Assets. 2022. URL: https://assets.kpmg.com/content/dam/kpmg/sg/pdf/2022/11/investing-in-digital-assets.pdf
8. PCAOB. Audits Involving Cryptoassets. 2020 URL: https://pcaobus.org/Documents/Audits-Involving-Cryptoassets-Spotlight.pdf
9. Deloitte. Global Blockchain Survey. 2021. URL: https://www2.deloitte.com/content/dam/insights/articles/US144337_Blockchain-survey/DI_Blockchain-survey.pdf
10. FASB. Accounting for and Disclosure of Crypto Assets. 2023. URL: https://www.fasb.org/page/PageContent?pageId=/projects/recentlycompleted/accounting-for-and-disclosure-of-crypto-assets.html
11. Chainalysis. Blockchain Analytics Tools for iproved Audit. URL: https://www.chainalysis.com/services/
12. Elliptic. Crypto Compliance for Centralized Exchanges URL: https://www.elliptic.co/industries/centralized-exchanges
13. AICPA. Accounting for and auditing of Digital Assets practice aid. 2025. URL: https://www.aicpa-cima.com/resources/download/accounting-for-and-auditing-of-digital-assets-practice-aid-pdf
14. Dai J., Vasarhelyi M.A. Toward Blockchain-Based Accounting and Assurance. Journal of Information Systems. 2017. № 31(3). pp. 5–21. URL: https://doi.org/10.2308/isys-51804
15. Oosthoek K., Doerr C. Cyber Security Threats to Bitcoin Exchanges: Adversary Exploitation and Laundering Techniques. 2020. URL: https://ieeexplore.ieee.org/document/9300238
16. Cong L., He Z. Blockchain Disruption and Smart Contracts. The Review of Financial Studies. 2019. № 32(5). pp. 1754-1797. URL: https://academic.oup.com/rfs/article-abstract/32/5/1754/5427778?redirectedFrom=fulltext
17. Messari. Messari Market Data Service. URL: https://docs.messari.io/docs/market-data-methodology
18. CoinMarketCap. CoinMarketCap’s Crypto Playbook. 2023. URL: https://s3.coinmarketcap.com/uploads/2023-cmc-crypto-playbook-en.pdf
19. The CPA Journal. Auditing Cryptocurrency Companies. 2025. URL: https://www.cpajournal.com/2025/03/24/auditing-cryptocurrency-companies/
20. Thomson Reuters. Crypto Auditing: A Guide to Reporting and Compliance. 2025. URL: https://tax.thomsonreuters.com/blog/crypto-auditing-a-guide-to-reporting-and-compliance/
21. ISACA Journal. Assertion-Based Financial Audit Procedures Related to Crypto Assets. 2024 URL: https://www.isaca.org/resources/isaca-journal/issues/2024/volume-2/assertion-based-financial-audit-procedures-related-to-crypto-assets
22. ICAEW. Considerations for Auditing Cryptocurrencies. 2024. URL: https://www.icaew.com/-/media/corporate/files/technical/technology/know-how/considerations-for-auditing-cryptocurrencies.ashx
23. ScienceDirect. Issues, Risks, and Challenges for Auditing Crypto Asset Transactions. 2023. URL: https://www.sciencedirect.com/science/article/abs/pii/S1467089522000215
24. Bayes Business School. Client-level Exposure to Cryptocurrency and Auditor Responses. 2023 URL: https://www.bayes.city.ac.uk/__data/assets/pdf_file/0006/756177/cryptocurrency_and_auditor_responses.pdf
25. Review of Accounting Studies. Financial Reporting for Cryptocurrency. 2023. URL: https://link.springer.com/article/10.1007/s11142-022-09741-w
26. PwC Switzerland. Crypto Custody: Risks and Controls from an Auditor’s Perspective. 2023. URL: https://www.pwc.ch/en/insights/digital/crypto-custody-risks-and-controls-from-an-auditors-perspective.html
27. Sage Journals. Enterprise Audits and Blockchain Technology. 2023. URL: https://journals.sagepub.com/doi/full/10.1177/21582440231218839
28. SEC. Staff Accounting Bulletin No. 121: Accounting for Obligations to Safeguard Crypto-Assets. 2022. URL: https://www.sec.gov/oca/staff-accounting-bulletin-121
29. Financial Accounting Standards Board (FASB). Accounting for and Disclosure of Crypto Assets. Proposed Accounting Standards Update. 2023. URL: https://www.fasb.org/document/blob?fileName=ASU2023-CryptoAssets.pdf
30. Pinsker R., Wheeler P. Auditing Smart Contracts: Challenges and Research Opportunities. Current Issues in Auditing. 2020. 14(1), A13–A21. URL: https://doi.org/10.2308/ciia-52579
31. Yermack, D. Corporate Governance and Blockchains. Review of Finance. 2017. № 21(1). pp. 7–31. URL: https://doi.org/10.1093/rof/rfw074
32. Chainalysis. Crypto Crime Report: Trends and Compliance Solutions. 2023. URL: https://go.chainalysis.com/2023-Crypto-Crime-Report.html
33. International Financial Reporting Standards (IFRS). (2019). Holding of cryptocurrencies. IFRS Interpretations Committee. URL: https://www.ifrs.org/news-and-events/2019/06/agenda-decision-cryptocurrencies-june-2019/
34. Kanu, David Hope. Digital Currencies Financial Reporting and Auditing: A New Concern for Accounting Professionals in the Accounting Industry. 2025. URL: https://papers.ssrn.com/sol3/Delivery.cfm/5138691.pdf?abstractid=5138691&mirid=1