The Role of Crypto Currency in the Accounting Industry

Running head: CRYPTO CURRENCY
CRYPTO CURRENCY
Name of Student
Name of University
Author’s Note

Introduction
The chosen topic for this particular assignment is the role of crypto currency and its
impacts on practices within the accounting industry. Bit coin has been the most commonly
known crypto currency because of its increase in popularity (Kokina, Mancha and Pachamanova
2017). With the usage of crypto currency, the users are allowed to exchange their values in a
digital manner. The industry that has been chosen for this particular assignment is accounting.
This assignment would discuss regarding the impacts of using crypto currencies in the field of
accounting. Accountancy can be described as fundamentally based around various transactions
that are financial in nature (Higgins 2018). Hence any move that would be towards the usage of
crypto currencies by individuals or business and governments is likely to have significant
ramifications for that particular profession. Crypto currencies are growing to great extent since
some years and most of the people have heard of the tem bit coin, though most of them do not
have any idea regarding the fact that how it actually operates. Besides bit coin there are
numerous other digital currencies that are not well known like bit coin (Karajovic, Kim and
Laskowski 2017). These currencies include Ethereum, Litecoin, Ripple and many more.
The usage of crypto currencies for the purpose of buying services or goods is still in the
initial stages but it has been increasing in the form of a particular established form of payment.
An example of this which can be considered include the usage of PwC which has already
undergone its initial payment in bit coin and numerous more retailers that perform their
operations online and some online retailers such as Expedia allows their customers to make
payment in bit coins (Gordon 2018). Various businesses are presently in the state of research as
well as development of adopting crypto currencies. A particular certified finical technical as well
as market analyst along with a trading mentor. The standard bank has integrated he technology of
block chain and they have carried out the initial crypto payment from a particular institutional

bank (Kuhn 2018). They have also proceeded in the verge of launching a particular application
for payment carried out in the form of crypto currencies. This would be done with the help of
Ripple. The usage of crypto currencies has numerous impacts on the industry of accounting.
These impacts have been mentioned in this assignment in a detailed manner.
Literature review
Crypto currency has been used by various industries for numerous purposes. Similarly
the crypto currency has been proved to be useful for the industry of accounting hence this field
has been using it for number of their operations (Moll and Yigitbasioglu 2019). After utilizing it
for a particular span of time, it has been realized that the usage of crypto currency has impacted
the industry of accounting in a negative way as well, besides providing numerous advantages.
One of the obvious areas that contributed in adopting the usage of crypto currency is considered
to be an incentive for various customers to buy or carry out any task. According to Ko, Lee and
Ryu (2018), clients can be incentivized in order to participate in the process of answering various
questionnaires, they are paid reward in return. These rewards were provided in the form of
crypto currencies just after the participants have submitted their questionnaires or by having a
client to receive crypto in the form of a premium for her or his participation to a particular
activity for an entity. An example of this is allowing sharing a particular amount of data and
much more information.
According to Dogru, Mody and Leonardi (2018), widespread usage of crypto currencies
have the chances of implications for the accountants, in the services that they provide to their
clients and the way they operate their business. From a perspective of financial reporting, states
that the best advices that can be provided include ensuring the fact that they keep perfect records,
so that they are allowed to comply with requirements of taxation. As per Gaither and Joanie
Sompayrac (2018), at the time of purchase of crypto currencies, nothing could be expected at the

particular point of sale. Tax is meant to be liable on the amount of profit that is earned when an
individual sells something which has an increased value compared to before. This is known as
capital gains tax. Overall tax free allowance for the asset gained by an individual is around
11,700 Euros for the year of 2018- 2019. In case the profit from selling the crypto currency
addition with other asset gains is comparatively less than expected, the individual would need to
report this and pay the tax on it. in case an individual sells up to four times the overall allowance
of the crypto currency assets, and even if the individual makes a profit of less than 11,700 Euros,
the individual has to report this particular sale to the HMRC. Besides the treatment provide by
accounting, accountants and advisors must also highlight the dangers that might come from the
usage of crypto currencies. The lack of various regulations in the world of crypto currency, has
resulted in significant rise in various criminals that use these digital monies in order to launder
money and hence carry pit various criminal that are financial nature.
As per Avdeychik and Capozzi (2018), accounting firms are responsible for ensuring the
fact that the clients have engaged themselves in the transactions related to crypto currencies and
have been a subject to enhance due to diligence measures. Screening against sanctions that are
high in quality, people that are exposed in the aspects of political issues as well as adverse media
have been minimum level of regularity. This is because of the diligence that should be
implemented as well as accountants must be conducted added checks when the transactions are
inappropriate in nature. In the long term, there have been potential for crypto currencies in order
to help the fluctuations in managing the currencies. According to McKay and Peters (2018), any
strategy to manage the fluctuations in management of crypto currency would need to come along
with a warning. An example of this includes the US government to introduce various tariffs on
the import of goods and here the threat of trade wars contribute in escalating various businesses
that usually operates overseas; they might use the crypto currencies as a particular strategy for
reducing their risks. Accountants should be ready in order to help the clients to explore the