Question

1. What does an individual have to consider in auditing if he/she trades with bitcoins? Focus on both accounting and non-accounting implications.

Answer 1

When some one is trading with bitcoins

some one has to consider that the money made to buy the bitcoin is a investment .

and from buying should record the entry , as in decentralised accounting system.

if the individual is sold some bitcoins we have to take whether period is short term or long term for tax implications.

for accounting implications we have check whether the bitcoins entry made at each time of investment , have to report the gain / losses incurred from the type of transaction taken place.

its a challenge to audit of bitcoins as cryptocurrency keeps fluctuate the value every time with its trading,

with that he can the client for services received by him, as we here book entries as like stock , mutual funds.

non accounting implications as it is treated as property of investment , when its sold will incurr gain or losses then based on the period of investment the individual as to pay taxes as per internal revenue service , its being like gambling should the tax implications.

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