Audit and reporting for crypto activities

All crypto-currency companies that have been registered are required to keep accounting records. State bodies should constantly receive information about the financial condition of the enterprise, the results of its work, and financial flows. To do this, it is necessary to file tax returns on time, pay taxes. Management can do the bookkeeping on their own. You can also hire a qualified accountant, or use the accounting services of specialized firms.

If there is a cryptocurrency on the balance sheet, it is necessary to create its own balance sheet item for each type. Revaluation should be carried out separately, since digital currencies may have different values at the date of the report. In a separate balance sheet item, you must also indicate the cryptographic assets of application users (if any). This is very important, because in the process of an audit of crypto activities, it is necessary to separately assess the assets of the company and the assets of users. In addition, such information must be disclosed in the appendix of the financial report.

Audit of crypto activity: verification of smart contracts

One of the effective forms of audit in the field of cryptocurrencies is the audit of smart contracts, which minimize the presence of the human factor due to the decentralization of the process, making it as transparent as possible. Smart contracts are the basis for building almost all projects that require an audit. Not surprisingly, many crypto audit firms provide smart contract audit services.

The procedure includes checking the project code for vulnerabilities that can cause external interference, disruption of the correct functioning of the platform, and even its hacking. An audit of crypto-currency activities should help identify backdoors that allow platform owners to perform undesirable actions, for example, change wallet addresses, withdraw liquidity.

There is no one hundred percent guarantee that the project is as transparent as possible and will not be hacked. Ordering audit services shifts all responsibility to the audit company. At the same time, the specialists of such organizations are motivated to carry out quality and reliable checks.

Reporting of crypto activities: up-to-date information on the financial position

The purpose of reporting cryptocurrency activities is to provide up-to-date information regarding the financial position of the firm, the results of operations and cash flows. When compiling reports, specialists are guided by generally accepted financial reporting standards that do not contradict current legislation, as well as international practice in the crypto-sphere.

It is important to disclose and justify the information in the financial report, taking into account the purposes of acquiring cryptocurrencies. When buying a small amount of bitcoins, a detailed description is not required. This point does not apply to enterprises whose entire business is built on cryptographic currency. In this case, sales revenue, payment of expenses and dividends are presented in virtual currency. To obtain an objective view of the organization, you need to disclose its accounting policy.

Audit of cryptocurrency activities: the main tasks of the procedure

An independent audit includes the following important tasks:

• assessment of the correctness of accounting;
• checking the reliability of financial statements.

Auditing companies with cryptocurrencies on their balance sheets is a complex procedure, since every transaction can have hidden risks. Before proceeding with the audit, the specialist should obtain the following information:

• types of cryptographic assets on accounts;
• the purpose of owning crypto assets;
• the place where the assets are stored;
• features of transactions;
• the origin of crypto assets;
• methods of transferring information about transactions to the accounting department;
• possession of a valid license;
• internal accounting rules.

It is not easy to find an expert in the crypto-sphere, so you should think about finding a qualified auditor of crypto-currency activities in advance.

Crypto Activity Reporting: Accounting Services for Crypto Companies by Professionals

Crypto accounting, auditing and reporting of crypto activities are fairly new areas that are constantly evolving. You can order these services from Blocons, which employs highly qualified specialists. Thanks to significant experience in the crypto-sphere, our team has developed its own effective methods for accounting for crypto-currencies. Specialists constantly improve their knowledge and skills, study the latest news from the world of finance and blockchain, which allows them to provide services at the highest level.