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Episode 53 | Marnus Kruger & Chris O'Reilly from Harris & Trotter on Getting Crypto Companies Audit Ready
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An external auditor is appointed to provide an independent examination of the financial statements to ensure they provide a true and fair view.
And in return provide the confidence to stakeholders that management is doing their job well.
Auditors proceed by testing the internal controls and performing substantive tests.
What substantive tests mean is that auditors have a range of assertions, such as completeness, existence, valuation, cut-off, and occurrence that they use to develop their audit procedures.
To help us understand how to get companies having crypto on their balance sheet audit ready, I spoke with Marnus Kruger & Chris O'Reilly, Technical Accounting Manager and Lead Finance Engineer at Harris & Trotter.
Harris & Trotter, which provides accounting, audit, and taxation services, has made a name for itself in the digital assets space.
Today it serves around 450 companies including the likes of 1inch, Wintermute, The Sandbox, Blockchain.com, Bitfury, P2P and Mercuryo.
In this episode, we will take each of the financial assertions to provide you with an understanding of how to be ready when auditors come knocking at your door.
Topics Covered:
- Episode intro (00:37)
- Marnus & Chris’s story of how they got into blockchain (3:02)
- Criteria for accepting an audit engagement (6:48)
- Verifying ownership of crypto (9:02)
- Valuation of crypto and choosing cut-off time (14:34)
- Recoverability of assets from DeFi protocols (18:49)
- Thank you to our sponsor Cryptoworth (20:50)
- Completeness of on-chain transactions (22:25)
- Good practices for wallet hygiene (27:12)
- Tests of controls for crypto (28:51)
- Harris & Trotter crypto accounting services (33:54)
- Audit readiness with Harris & Trotter (35:03)
- Thank you to our sponsor Convoy Finance (36:45)
- Signature matching tool to verify ownership (38:14)
- Live proof of stablecoin reserves tool (40:26)
- Do auditors rely on crypto sub-ledgers like Cryptio, Cryptoworth, Tres Finance, etc (41:44)
- Upskilling accountants & auditors for crypto (44:55)
- Closing thoughts (47:42)
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