#53: Getting Crypto Companies Audit Ready with Marnus Kruger & Chris O'Reilly from Harris & Trotter

Dec 8, 2023

Marnus Kruger and Chris O'Reilly from Harris & Trotter are experts in auditing for crypto companies. They dive into how to prepare for audits, emphasizing the importance of verifying ownership of crypto and proper asset valuation. The duo discusses the criteria for accepting audit engagements and the complexities of recoverability from DeFi protocols. They also explore innovative tools for proving crypto ownership and the crucial role internal controls play in maintaining financial accuracy. Tune in for valuable insights on navigating the audit process in the digital asset space!

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Intro

00:00 • 6min

Navigating Crypto Audits

05:33 • 15min

Assessing Data Recoverability and Ensuring Completeness in Crypto Accounting

20:04 • 3min

Navigating Crypto Audits

23:09 • 7min

Navigating Digital Asset Auditing

30:13 • 8min

Revolutionizing Crypto Ownership Proof

38:40 • 14min

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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