Why Deloitte, KPMG, Mazars, PWC and other Big4’s are not auditing crypto exchanges such as Binance, Crypto.com and others?
Auditing is the process of reviewing and verifying the accuracy and reliability of a company’s financial statements and records. The purpose of an audit is to provide assurance that the financial statements accurately reflect the financial position and performance of the company.
Here are the top 3 reasons that Deloitte, Mazars, KPMG and other auditors are not auditing Binance or other large crypto exchanges:
1: Limited Understanding.
For starters, so far everyone thought that crypto is not here to stay, so traditional companies have a limited understanding of the space, and they are still scratching the surface of the ice.
If an auditor makes a mistake during the audit process, it can have serious consequences (it could lead to the auditor issuing a qualified or adverse opinion on the financial statements. This could lead to loss of confidence in the company and potentially harm its reputation.)
3: Fines & reputational damage.
The auditor could be held liable for any losses suffered by shareholders or other stakeholders as a result of the mistake, but also get fined.
4: No software capabilities.
They do not have the software capabilities to audit complex and innovative fintechs such as cryptocurrency exchanges (think Earn Products, Staking Products, Crypto Loans, Airdrops, Derivatives & Contracts etc) — its complex!
Things to know: Whether if the company is dealing with cryptocurrencies, or any other instrument, the process of auditing must be done by independent professionals who are trained to perform audits.
How does the auditing process looks like?
Auditors review a company’s financial statements and records, and test the accuracy of the information by examining supporting documents and conducting other procedures. The auditor then issues an opinion on the financial statements, stating whether they are presented fairly in accordance with generally accepted accounting principles (GAAP) or international financial reporting standards (IFRS).
Thank you all for reading!
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