Weekly Wrap – 13th February 2014

 

Hi I am Tom McLeod of McLeod Governance.

This is what I would be thinking about this week.

How Would You Audit Bitcoin?

At the conclusion of a recent presentation – ironically on the future of internal audit – a hand went up in the audience and asked how would I audit Bitcoin?

Bitcoin being the virtual currency system that has had considerable press of recent times.

It was an interesting question and I must admit that my first response was to say that it was a new technology and we may have to consider new ways of auditing it.

What Does Bitcoin Represent?

I only wish I had had in front of me a recent Financial Times article which perfectly articulated that it is not a new technology and consequently we don’t have to invent new ways of auditing it.

The Times article suggested that there are three ways of viewing Bitcoin.

As a virtual currency.

As a means of exchange.

Or as a speculative asset.

Do We Need New Auditing Strategies?

We have long had audit strategies that apply to those three areas and there is no reason to suggest that those strategies would not work as it relates to Bitcoin.

As we progress into the future of virtual currencies, there will be many different variations presented before us.

It will be interesting to see what the regulatory response is.  Does the current legislation apply and are the current monetary regulatory systems effective over such things as virtual currencies?

One thing I am certain of now though is that our audit strategies – whilst they will necessarily always need to be improved to address the underlying issue – it won’t necessarily need to be reinvented.

Subscribe to Receive Our Email Updates

  • This field is for validation purposes and should be left unchanged.