From blockchain to cryptocurrency to digital wallets, there is no disputing that the digital economy is here to stay—and that there is an impact on the CPA profession.
As Gabriella Kusz, CEO of the Global Digital Asset and Cryptocurrency Association, said in a CalCPA Rise & Stride podcast: “CPAs aren’t just your accountants. They’re trusted advisors. And they help many businesses grow, develop, expand and succeed. In that respect, they will likely be, just like some of the investment advisors, sort of a first point of contact.”
As cryptocurrencies like Bitcoin, Ethereum and Litecoin continue to gain mainstream momentum, it’s important for accounting professionals to have a working knowledge about the unique characteristics of cryptocurrency; their valuation, classification and financial reporting implications; and any specialized accounting treatment.
This understanding opens opportunities for CPAs to provide advisory services—a key growth strategy for today’s CPA firms—to clients. As businesses and individuals increasingly use cryptocurrencies, questions will come up about tax compliance, internal controls and risk management. CPAs equipped with cryptocurrency knowledge can assist clients in navigating this landscape.
There is a reason—lots of reasons, actually—why CPAs are considered the most trusted advisors in business. They are, more likely than not, the first person a client will go to when seeking answers to financial questions.
Cryptocurrency is not just a passing fad. What had been a niche area has fundamentally shifted the financial world. Understanding the potential implications of cryptocurrency is essential for CPA to provide the informed advice that clients and stakeholders are looking for.
And drilling down further to blockchain technology, the backbone of cryptocurrencies, there’s a need for CPAs to understand potential implications on the greater business world—everything from supply chain management, auditing and smart contracts.
Like any change, there may be some hesitancy to explore this area. After all, cryptocurrrency volatility can make their value difficult to predict and account for. And the decentralized and anonymous nature of cryptocurrencies presents tax compliance and regulation challenges.
But challenges also carry opportunities. And the ability to understand and leverage the potential of cryptocurrency is essential for CPAs to remain relevant and effective in a rapidly changing financial landscape.
Interested in building your knowledge in this area? Be sure to visit CalCPA's website and enter “cryptocurrency” or “blockchain” in the search box.
Denise LeDuc Froemming, CPA, CAE, MBA is President & CEO of CalCPA and CalCPA Education Foundation.