Companies’ Crypto wallets Identification for Auditing Purposes

Abstract

The article examines the problem of identifying the crypto wallet of an audited organization, which is becoming increasingly important and relevant as crypto economy develops. Companies that conduct transactions with crypto assets are chosen as the objects of the analysis. The number of these companies is constantly growing due to the promotion of a completely new sector of the economy — crypto economy. In addition, the shares of these companies are traded on global financial markets, and the problem of auditing their crypto assets is becoming one of the most difficult within traditional auditing procedures. The aim of the study was to develop an audit methodology for the identification of business entities’ cryptocurrencies. The author of the paper presents the cases of refutation and rejection of the recognition of crypto assets along with the required list of auditor’s actions. The article raises the issue of «toxic» crypto assets, which in the near future may become a big problem for companies using them. Companies within the framework of absolutely legal activities may receive assets of illegal origin, which may subsequently not be recognized as part of the audit and not be included in the total amount of the assets of the organization. Based on such cases of rejection (denial of ownership and affiliation), criteria for the recognition of crypto assets have been developed. As a result of the study, a methodology for conducting the necessary auditing procedures is proposed, based on the auditing of assets using blockchain technology, which makes it possible to identify crypto assets operating in blockchains both with and without the presence of smart contracts. The methodology at this point in time is sufficient to carry out the procedure for the recognition of any crypto assets of the audited organization. In the course of the study, methods of synthesis, analysis, induction and abduction were used.