Abstract
Bitcoin revolutionised the digital economy, drawing from Satoshi Nakamoto’s ground-breaking integration of insights embedded in forgotten literature. However, inadequate authoritative guidance on auditing pseudonymous cryptocurrencies, accounting curricula stagnation and scholars’ ignorance of Bitcoin challenge the inherent risk assessment abilities of auditors and aspiring auditors, resulting in audit deficiencies and recusals. This descriptive case study aims to determine the inherent risks that arise from Bitcoin transactions between related parties by investigating how South African accounting students perceive Bitcoin’s inherent related-party risks. Since Bitcoin is too technical for average accounting students, this study prepares them for a task they must perform as trainee auditors and candidates writing their Initial Test of Competence exams via role-playing teaching activities in an auditing classroom environment. Comprehensive literature reviews and the fictitious case of Bob Limited conceptualise Bitcoin’s fundamental properties and inherent risks arising from pseudonymous Bitcoin mining and selfish mining attacks by related parties following a pragmatic mixed-research paradigm. The descriptive analysis of quantitative questionnaire responses revealed that the students perceived the risk of accuracy, valuation and allocation (account balance assertion) as Bitcoin’s likeliest inherent related-party risk and the risk of cut-off (classes of transaction assertions) as the unlikeliest based on the likelihood of occurrence. Furthermore, this study recommends using role-playing to teach technical accounting curricula. The author theorised guidance beneficial to educators who want to integrate Bitcoin into auditing classrooms at an undergraduate level via role-plays to produce competent auditors willing to audit clients using pseudonymous cryptocurrencies.
Keywords: Accounting education, Bitcoin, likelihood, inherent risks, mining, pseudonymity, related-party.