Accounting Research Opportunities for Cryptocurrencies

Abstract

During recent years, cryptocurrency has gained the attention of many large companies such as Facebook, Expedia, Apple, and Overstock to name a few. The acceptance and use of cryptocurrency in business transactions can have a major impact on a company's accounting system. However, accounting research exploring issues related to cryptocurrencies is sparse. Therefore, we identify research questions that the accounting profession should address concerning cryptocurrencies. We categorize these research questions using Rogers' theory of diffusion of innovation in an attempt to encourage and extend accounting research in cryptocurrencies to influence the design, development, adoption, implementation, and operation of the technology. We recommend that researchers take a more prescriptive approach to research, rather than a descriptive approach, given that cryptocurrency is in the infancy stage of development and adoption.

Exploring the uncharted territories: a structured literature review on cryptocurrency accounting and auditing

“…It is considered that the existing standards can be re-evaluated and modified to include the particular characteristics of crypto-assets, thus reducing the diversity and asymmetry in accounting practices (Procházka, 2018; Vincent and Davenport, 2022; Yan et al. , 2022a).…”

“…It is considered that the existing standards can be re-evaluated and modified to include the particular characteristics of crypto-assets, thus reducing the diversity and asymmetry in accounting practices Vincent and Davenport, 2022;Yan et al, 2022a). This represents a short-term solution to the problem of the accurate treatment of cryptocurrencies, calling for a specific standard to be issued.…”

“…Cryptocurrencies have gained widespread popularity as of recent times, including among hackers and other cybercriminals. They are more susceptible to being utilized in illicit and criminal activities compared to fiat currencies or conventional online payment systems due to their unique characteristics such as the inherent difficulties in their tracking (Angeline et al, 2021;Delva Benavides and Torres Amaya, 2022), the vulnerability in crypto wallets (Vincent and Davenport, 2022), their decentralized nature (Angeline et al, 2021) and, without a doubt, their anonymity (Cyrus, 2023;Derun and Mysaka, 2022). The risks are elevated due to the absence of legal regulations regarding crypto rights in case of hacking or cyberattacks on an entity's data (Petrova et al, 2020), which not only poses risks to the entities involved but also to the economy and society.…”

“…The literature review revealed a multitude of fraudulent and malicious activities in which cryptocurrencies can be employed. These are linked both to the financial sphere: money laundering, tax evasion, financial manipulation, commercial fraud (Angeline et al, 2021;Martin cevic et al, 2022;Scarcella, 2021;Vincent and Davenport, 2022;Zadorozhnyi et al, 2018), as well as to the non-financial area: financing terrorism, black market activities, drug trafficking, arms smuggling, gambling, illegal fundraising and pyramid scheme investments (Angeline et al, 2021;Martin cevic et al, 2022;Yan et al, 2022a;Zadorozhnyi et al, 2018).…”

“…A primary emphasis in auditing cryptocurrency transactions lies in the necessity for auditors to improve their understanding and expertise in virtual currencies and the related risks (Harrast et al, 2022), which is influenced by several contributing factors. These factors Exploring the uncharted territories include the lack of prior experience and technical expertise on the part of the auditor, as well as deficiencies on the part of the client in terms of risk management, the preparation of accounting reports, distribution of responsibilities or the maintenance of adequate internal controls (Ozeran and Gura, 2020;Vincent and Davenport, 2022;Vincent and Wilkins, 2020). It is necessary for auditors to increase their level of competence in the area of virtual currencies through training programs and expanding their knowledge or by hiring specialists to take part in their audit processes (Ozeran and Gura, 2020;Smith et al, 2019).…”