Accounting

The changing crypto landscape brings new risks to accounting

Published

1 year ago

February 3, 2025

Business Finance News

Enjoy complimentary access to top ideas and insights — selected by our editors.

The Internal Revenue Service’s new regulations and pro-crypto President Donald Trump’s return to office introduce fresh changes for accountants in 2025. At what point, many experts wonder, could the cost of dealing with digital assets outweigh the benefits?

Trump has expressed his support of the crypto industry since mid-2024. His actions include the creation of decentralized finance firm World Liberty Finance in a joint venture with his sons, Eric Trump and Donald Trump Jr., and proposals to create a strategic U.S. government reserve of bitcoin.

“We’re going to do something great with crypto,” Trump said in a December interview with CNBC’s Jim Cramer. “Because we don’t want China — and not just China, others are embracing it — and we want to be the head.”

Trump has even launched his own meme coin, “$TRUMP“, which hit the market on Jan. 17 at around $7 per coin and soared to a value of roughly $75 per coin on Jan. 19 and a market cap of $7.6 billion on Jan. 23, according to data from CoinMarketCap. First Lady Melania Trump also launched her own meme coin on Jan. 19, simply named “MELANIA,” which similarly started out around $7 per coin but now trades around $4 per coin as of Jan. 23.

Industry experts were fairly convinced prior to the mintings that the Trump administration would usher in a more crypto-friendly regulatory environment, and are now more certain of their predictions.

Justin Wilcox, tax and advisory services partner and cryptocurrency practice lead at Connecticut-based accounting firm Fiondella, Milone & LaSaracina LLP, said the coins “signal a crypto-friendly administration versus the prior four years under Biden and [former Securities and Exchange Commission Chair] Gary Gensler.”

“The SEC under the Trump presidency is already establishing a crypto task force, which will focus on a regulatory framework for digital assets,” Wilcox said. “This framework will hopefully result in clear guidelines for founders of cryptocurrencies to understand the relevant legal implications ahead of time.”

Expectations also include “legislation [that] may be pushed forward to establish a ‘strategic reserve’ for bitcoin and potentially other digital assets,” he said.

Regulators with the IRS have already put new accounting standards into place this year, featuring a new 1099-DA form and the end of “universal wallet accounting.”

Both of these changes increase the information lift required by brokers, taxpayers, banks and other parties (those working for decentralized finance organizations have another two years until they also need to comply with the IRS’s new requirements) reporting crypto transactions and holdings. It’s left many skeptical of how accurate filings will be at the start.

Digital asset companies such as the accounting solutions provider TaxBit and tax platform Ledgible have already begun incorporating new features or products into their offerings to account for standard changes from the IRS and the Financial Accounting Standards Board.

Ledgible’s Digital Asset Assessment program will help clients determine if their existing compliance, data and reporting infrastructure is up to par with current requirements. TaxBit’s Principal Market Analysis tool allows companies to use specific policy elections when determining their principal market in the valuation of digital assets.

“The DeFi tax reporting regulations will be challenging to brokers and taxpayers as the DeFi systems and protocols are not centrally governed,” Kell Canty, chief executive of Ledgible, said. “Self-calculating the true cost basis and calculations throughout various aspects of DeFi will be very challenging to taxpayers when it comes to calculating gains and losses. … For these DeFi brokers, the challenge is in collecting personal tax information from their users.”

While many of Trump’s legislative crypto efforts are still in their infancy, CPAs and other professionals are working to adapt for the 2025 tax year and beyond.

Chad Cummings, chief executive of Naples, Florida-based law firm Cummings & Cummings Law, said challenges abound for taxpayers and accountants who have to now account for audit risks, fair market value determinations, basic transaction calculations and more.

“For CPAs, this means greater demand for advisory services related to tracking and reconciling crypto transactions, implementing portfolio tracking systems and preparing for potential disputes with tax authorities,” Cummings said. “However, firms that fail to invest in staff training or crypto-specific technology risk reputational and financial exposure.”

Learn more about some of the top digital asset developments across the accounting profession in the last few months and what experts are doing to stay ahead of the curve.

AICPA revises educational material on digital assets

Leaders of the American Institute of CPAs updated its practice aid for learning more about accounting for and auditing digital assets in January, following updated standards out of the Financial Accounting Standards Board.

The revised practice aid, which was developed using the notes of members from the AICPA’s Digital Assets Working Group, now includes a modernized definition of digital assets, new terms and questions such as, “Are nonfungible tokens in the scope of FASB ASC 350-60?” and “Are ‘wrapped tokens’ in the scope of FASB ASC 350-60?”

Updates include the removal of the term “crypto assets” in favor of new nomenclature like crypto intangible assets, in-scope crypto intangibles assets and out-of-scope crypto intangibles assets.

What a bitcoin reserve means for the accounting profession

With the naming of venture capitalist and former PayPal chief operating officer David Sacks as the White House’s AI and crypto “czar” and the Securities and Exchange Commission’s appointment of “Crypto Mom” Commissioner Hester Peirce to head up its cryptocurrency-focused task force, accountants are forecasting a high chance of bitcoin policy moves on the horizon.

In speaking with AT, experts with the Wall Street Blockchain Alliance say these appointments, in addition to controversial proposals to institute bitcoin reserves by President Trump and state changemakers, create an optimal regulatory environment for making the concept a reality — but risks will remain.

“Bitcoin’s price volatility itself poses a significant risk. … Large-scale government investments could lead to substantial fluctuations in reserve valuations, potentially impacting overall financial stability,” Sean Stein Smith, member of the alliance’s advisory board, and Ron Quaranta, chairman and chief executive of the alliance, said.

New IRS rules for DeFI tax reporting take effect

Capping off 2024, the Internal Revenue Service issued its final regulations requiring decentralized finance brokers to record the sales and transactions of digital assets on its Form 1099-DA, as well as added support for those struggling during the transition period.

While DeFi brokers have a two-year buffer until the Jan 1. 2027, start date, centralized exchanges and platforms such as brokers, traders, banks and taxpayers must abide by the new rules as of Jan. 1, 2025.

“Although the applicability date proposed by the proposed regulations applied to gross proceeds reporting for sales of digital assets effected on or after Jan. 1, 2025, the Treasury Department and the IRS agree that a delay is warranted for trading frontend service providers treated as brokers (DeFi brokers) under these final regulations,” the regulations said.

SEC chairman nominee Paul Atkins predicted to bring more deregulation

SEC Commissioner Mark Uyeda, who is acting chairman of the agency while Trump nominee Paul Atkins navigates confirmation hearings, expressed the hope that if approved, Atkins will usher in an era of regulatory easing at the agency.

Uyeda said during talks at the AICPA & CIMA Conference on Current SEC and PCAOB Developments in December that he expects an Atkins administration to bring “a return to capital formation” as well as eagerness towards embracing cryptocurrency adoption.

“There are a number of things that we can be doing in this area, not only on the accounting side, but with the disclosures that are required, how you think about this in the context of custody, with respect to auditing crypto reserves,” Uyeda said. “There is so much we can be doing in these areas which I would expect the SEC to try to put renewed focus on.”

It’s the end of universal wallet accounting as we know it

Accountants have been hard at work since October to prepare cryptocurrency clients for the IRS Revenue Procedure 2024-28, which since it went into effect in January has fundamentally uprooted the “universal wallet” reporting standard for crypto holdings — leaving many scrambling to comply.

Rather than allowing taxpayers to report their cryptocurrency balances as a combined amount, they must now report those values to the IRS on a per-account basis.

“You’re talking about going from the universal wallet concept — which is imperfect without a doubt but something we can handle today — to what is, in essence, specific IDs where every wallet needs to be treated as its own universe for tax purposes,” Zach Gordon, founder of cryptocurrency accounting firm Red Five, told AT’s Chris Gaetano.

Accounting

FASB Standardizes Carbon Offsets Accounting Rules

Published

1 day ago

July 27, 2026

Business Finance News

FASB Standardizes Carbon Offsets Accounting Rules

In a decisive move toward standardized environmental financial reporting, accounting standards boards issued updated implementation guidance during the week ending July 25, 2026, regarding the formal recognition and valuation of corporate carbon offsets and environmental credits. The revised frameworks establish precise rules for how enterprises must measure, record, and disclose carbon credits on balance sheets, eliminating years of inconsistent reporting practices across public capital markets.

Under the finalized accounting standard, purchased carbon offsets can no longer be categorized under vague administrative expenses or unstandardized intangible asset accounts. Instead, organizations must classify environmental credits based on underlying operational intent—distinguishing between credits held for immediate compliance compliance obligations, long-term offset obligations, or active market trading. Furthermore, companies are required to evaluate carbon holdings for fair value impairment at the end of each reporting period, ensuring that depreciated or low-quality environmental credits do not distort corporate asset values.

The standardized rules carry significant implications for corporate audit committees and chief accounting officers. External audit firms are implementing rigorous verification protocols to validate the physical legitimacy, legal ownership, and scientific permanence of carbon credits claimed on balance sheets. Inaccurate or overstated carbon accounting claims now carry substantial financial litigation risk, alongside potential regulatory enforcement for misleading ESG disclosures.

To remain fully compliant, corporate accounting departments must establish centralized carbon tracking systems integrated into primary standard ERP ledgers. Accounting teams that proactively adopt standardized environmental reporting protocols will build investor credibility, streamline annual audit processes, and insulate their organizations against evolving regulatory scrutiny.

Accounting

Automated Tax Compliance Tools Reduce Risk

Published

1 day ago

July 27, 2026

Business Finance News

Automated Tax Compliance Tools Reduce Risk

Corporate tax departments reached a critical juncture in automated operational management. With nations worldwide rapidly enacting digital service taxes, localized value-added tax (VAT) mandates, and real-time electronic invoicing requirements, manual tax calculations have become obsolete. Modern corporate tax divisions are aggressively deploying AI-driven tax engine software to automate complex cross-border indirect tax calculations in real time.

The imperative for automated tax compliance stems from the sheer complexity of current trade policies and multi-jurisdictional commerce. E-commerce platforms, software vendors, and global manufacturers face constantly changing regional tax rates, statutory exemption rules, and cross-border tariff structures. Automated tax engines embed directly into enterprise enterprise resource planning (ERP) architectures, automatically applying correct tax codes at the point of sale, calculating real-time withholding amounts, and generating compliant e-invoices.

Automated audit trail generation represents another key advantage of modern tax tech integration. Advanced compliance platforms log every transactional tax determination on immutable digital ledgers, providing tax authorities with transparent, self-verifying audit trails. This capability drastically reduces the operational duration and administrative cost of corporate tax audits, protecting enterprises against severe penalties resulting from calculation errors or missed reporting deadlines.

For chief financial officers and tax directors, investing in automated tax compliance is a vital operational risk mitigation strategy. Automating routine tax calculations frees high-level accounting professionals to focus on strategic tax planning, transfer pricing optimization, and risk management in an increasingly complex global economic environment.

Accounting

Continuous Auditing Transforms Corporate ERPs

Published

7 days ago

July 21, 2026

Business Finance News

continuous auditing transforms corporate erps

As corporate accounting departments cross the threshold into late July 2026, the adoption of continuous, automated auditing systems has reached a definitive turning point. Driven by advances in artificial intelligence and deep integration with modern Enterprise Resource Planning (ERP) platforms, leading finance organizations are moving away from traditional, periodic post-hoc audits in favor of real-time, 100% transactional verification. This technological transition is redefining internal control environments, reducing compliance costs, and eliminating the structural delays inherent in legacy quarterly closing processes.

Unlike traditional auditing frameworks that rely on statistical sampling—a process that inevitably leaves operational blind spots—continuous auditing software monitors operational data feeds continuously. Every purchase order, electronic invoice, payroll disbursement, and cross-border wire transfer is automatically cross-referenced against established corporate governance parameters, regulatory tax schedules, and anti-fraud algorithms in real time. Anomalies or unauthorized ledger entries are flagged instantly, allowing internal audit teams to investigate and remediate compliance gaps immediately rather than months after the close of a financial period.

The implications for executive financial management are far-reaching. By embedding continuous verification directly into daily transaction workflows, chief financial officers gain uninterrupted visibility into the organization’s true financial standing. Real-time balance sheet auditing eliminates the severe operational bottlenecks associated with month-end and quarter-end financial reconciliations, freeing accounting professionals to focus on strategic financial modeling, tax planning, and capital allocation rather than manual data entry and spreadsheet consolidation.

However, implementing continuous auditing requires accounting leadership to invest heavily in data governance and technical upskilling. Internal audit teams must evolve from manual ledger reviewers into system architects capable of auditing complex algorithms and validating automated data pipelines. Accounting firms and corporate controllers that master continuous auditing will establish a resilient compliance framework capable of meeting stringent international regulatory standards with total transparency.