Hi hivers, if you are looking for the information regarding "Challenges of Auditing Crypto Portfolios," then you have landed on the right place. Accuracy, trust, and transparency mean auditing. It is reconciling the records with the bank account transactions. But things are different with crypto because crypto has a decentralized nature. Auditors suddenly cannot deal with crypto because there are a lot of things in crypto, such as decentralized platforms, digital wallets, assets, and more. Also, there is no regulation or clear guidance on crypto. That is why there is a frustrating process for auditing.
Here, we are going to discuss multiple challenges, and ownership verification is one of them. You need to understand that the traditional system is different, where the bank itself confirms the balance. Talking about the crypto world, then wallet signatures, third-party custodians, and blockchain explorers are the sources of information for auditors. So auditors need to depend on them. Clients use multiple wallets because in crypto, you don't need to be gonna use only one wallet, which is why no one can say who controls the wallet, especially with the decentralized wallets. The transaction and wallet are transparent.
Headache No. 2 is valuation. Crypto prices change in minutes, and do you know sometimes even some stable coins move and fluctuate. Which means the crypto market is extremely volatile, and the price runs like a cheetah in minutes. That is why valuation is difficult, unlike the stock market. The crypto market is available the whole week.
The problem with the crypto is that some say it is an asset, some say property, and some say it is just an asset. Some securities and commodities are different types of headaches. The problem is they treat crypto like they treated the money for many years; crypto is a new system, so you can't apply old methods to the new system. That's the reason the problem will always be there until you treat it uniquely.
No doubt, crypto is very beneficial and it is for the people, but scammers are misusing this technology. Greatest features like borderless transactions and anonymity are becoming a weapon for scammers. So if there is suspicious things are happening, nothing can be possible to take action against them. So big losses from scams will not be accounted for due to this reason. Paper money is not transparent, and criminal transactions are happening more with paper money, which does not mean paper money is bad; similarly, not everybody will use crypto for good things.
A regulation that balances things between technology and the people is necessary. This will not be possible overnight, but we have to wait for it long time because crypto is global and every country has a different approach to crypto. The world needs to come together to solve this issue, and regulations should not be harmful to crypto because this is great technology. Now I am signing off, enjoy Thursday, and I will see your viewpoints in the comment, also see your share and reblogs :p
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