THE IMPACT OF CRYPTOCURRENCIES ON AUDITING PRACTICES: A MALAYSIAN BASED CASE STUDY

Abstract

This study aims to explore the effect of cryptocurrencies on the field of auditing. As the popularity and prevalence of cryptocurrencies continue to rise, it becomes imperative to understand their implications for the practice of auditing and assurance services. The first objective of this research is to examine the level of awareness and understanding among auditors regarding cryptocurrencies. These factors can impact the reliability and accuracy of financial statements, and auditors need to adapt their audit procedures accordingly. The second research objective is to evaluate the challenges faced by auditors in auditing cryptocurrency transactions. This includes exploring the use of blockchain technology, which underlies most cryptocurrencies, to enhance audit trail accuracy, transparency, and efficiency. Additionally, cryptocurrencies may streamline certain audit procedures, automate reconciliation processes, and reduce the occurrence of fraud and manipulation. The third research objective is to identify the training and development needs of auditors to enhance their capacity in auditing cryptocurrencies and the fourth research objective is to propose recommendations for improving the regulatory framework and guidelines for auditors in cryptocurrency auditing. In order to achieve these objectives, a comprehensive review of existing literature, regulations, and industry practices will be undertaken. Additionally, primary data will be collected through qualitative interviews with auditing professionals, regulators, and technology experts to gain insights into the real-world challenges and opportunities faced in auditing cryptocurrency-related transactions. The findings of this study will contribute to the existing body of knowledge by providing a deeper understanding of the impact of cryptocurrencies on auditing practices. This research will enlighten auditors, regulators, and standard-setting bodies about the necessary adjustments and considerations needed to ensure the effectiveness and reliability of audits in the cryptocurrency era.