Nonfungible Tokens—Differentiated Crypto Assets in Need of Accounting and Attestation Guidelines; Analysis and Implications

ABSTRACT Even as recent headlines announce the risks of crypto assets, institutional and governmental adoption continues. Undeterred by short-term price declines and liquidation of speculative instruments, blockchain-based instruments and applications continue to receive billions in investment across the globe. And yet, accounting and attestation standards have failed to keep pace with this growth. This paper focuses specifically on the development of one type of crypto asset—nonfungible tokens (NFTs)—and the relevant accounting and auditing concerns. The first section reviews the nature of NFTs, differentiating them from other existing crypto assets. The second section examines factors that must be considered for the audit and attestation of NFTs. This paper raises questions that both the academician and practitioner must contend with as these crypto assets continue to be adopted.