Dear CYAUSE,

 

I am Head of Finance of a listed European group and I am reviewing the audit arrangements for our Cyprus subsidiary for the financial year ending 31 December 2026. We are approaching a limited number of Cyprus audit firms with relevant digital-asset experience and, at this stage, would like to understand whether the engagement could be of interest and what indicative fee range we could expect before proceeding to a detailed scoping discussion.

 

By way of brief background:

 

• The company is a Cyprus private limited company preparing its financial statements under IFRS and requiring a statutory audit.
• The 2025 financial statements have been completed and audited by another Cyprus audit firm and are publicly available through the group’s investor relations pages.
• 2025 involved a significant amount of historical clean-up, reconstruction and remediation work.
• 2026 is expected to be materially simpler, with substantially lower operational activity and a significantly smaller transaction population.
• The company primarily holds and realises existing investments and digital assets rather than undertaking significant new operating activity.
• Digital-asset balances and transactions are supported by structured wallet records from our institutional custody and monitoring platforms, together with reconciliations.
• Management is maintaining a structured, audit-ready supporting file and intends to have the key year-end reconciliations and documentation prepared in advance.
• The 2025 audit opinion contained one qualification relating to a historical payable balance. We would prefer any work required to remediate that matter to be scoped and priced separately from the core 2026 statutory audit.

 

Given the materially reduced 2026 activity and the availability of audited 2025 closing balances, we would be interested in a proportionate, risk-based audit approach while maintaining the full level of assurance required under the applicable Cyprus statutory and ISA requirements.

 

At this initial stage, could you please let us know:

 

1. Whether your firm would be interested and eligible to act as statutory auditor for 2026;
2. Your preliminary indicative fee range for the core 2026 statutory audit;
3. Whether first-year opening-balance and predecessor-auditor procedures would be included in that range or charged separately;
4. How you would normally approach audit evidence relating to wallets and digital assets where structured custody and monitoring data and underlying wallet data are available;
5. Whether any blockchain, valuation or other specialist fees would normally be charged separately;
6. Whether the historical payable remediation could be treated as a separate fixed or capped workstream; and
7. What information you would require from us in order to provide a more precise fixed-fee proposal.

 

For the final engagement, our preference would be for a fixed fee with clearly defined assumptions and exclusions, with any additional work subject to prior written approval. We would appreciate it if this preliminary tender process and any non-public information shared in connection with it were treated as confidential.

 

Kind regards,

 

---

 

Dear Client,

 

Thank you for a tender document that actually contains the information an auditor needs. We have taken the confidentiality point seriously and are happy to put a non-disclosure agreement in place before any further detail is exchanged. Our answers follow in the order you asked them, and we have been deliberately careful to separate what we can commit to now from what genuinely depends on data we have not yet seen.

 

Before the detail, one observation that we suspect matters most to your budget. A quieter year does reduce the core statutory audit effort, and it should. It does not reduce the digital-asset work in the same proportion, because that work is driven by the number of wallets, networks and integrations rather than by the value or the volume of activity. A company with half the transactions and the same wallet estate will see a far smaller saving than the arithmetic suggests. We would rather you heard that at the tender stage than at the fee-negotiation stage.

 

1. Interest and eligibility

 

Yes, subject to the usual acceptance procedures. A statutory audit in Cyprus must be signed by a firm licensed by the Institute of Certified Public Accountants of Cyprus, and we are. Acceptance is also subject to independence confirmation, anti-money-laundering onboarding and clearance with the outgoing auditor, none of which we would expect to be problematic, but each of which has to be completed before an appointment can be accepted rather than afterwards.

 

For the digital-asset procedures we work with a specialist blockchain team alongside the audit team, so the engagement is led by an audit partner with a technology lead and a blockchain lead attached. We will give you the names, backgrounds and respective roles before signature.

 

2. Indicative fee range for the core audit

 

We are not able to give you a responsible figure for the core statutory audit until we have the information listed at point 7. Any firm that quotes you a precise number for a digital-asset audit before seeing the wallet count and the transaction population is quoting on hope, and that is how fee disputes start.

 

What we can tell you now is how the fee is built. There are two components, and they behave very differently. The core statutory audit is priced on the ordinary drivers – the balance sheet, the complexity of the accounting, the group reporting timetable and the opening-balance work at point 3. The digital-asset workstream is priced separately on the wallet estate. For an engagement of the shape you describe, that second component has recently been running at around €35,000 excluding VAT, broken down as follows.

 

Digital-asset procedure	Indicative fee
Transaction reconciliation – unifying on-chain data, exchange exports and internal ledgers, and reporting exceptions	€10,000
Internal control review – assessment of control procedures over digital assets and formal recommendations	€3,000
Proof of reserves – substantiation of crypto assets and transactions	€3,000
Asset validation – existence, completeness, accuracy and the remaining financial statement assertions	€4,000
Test of ownership and control of wallets	€5,000
Risk assessment, source-of-funds and attribution reporting – screening of all wallets for AML and CFT purposes	€3,000
Expert assessment and reporting – an independent status report on the company’s blockchain activity	€3,000
Technical data delivery – raw on-chain data in JSON, CSV, HTML, XLSX, PDF and DOCX for independent cross-referencing	€1,000
Valuation of crypto-assets, including altcoins at cut-off	€3,000
Subtotal, excluding VAT	€35,000
VAT at 19%	€6,650
Total	€41,650

 

Two caveats sit on that table, and they are not boilerplate. First, the figures are indicative and subject to change once transaction volumes are known; the fixed fee is set in the engagement letter, not in a tender response. Second, the AML and CFT screening of the company wallets is performed as a preliminary step before onboarding and is payable in advance, and the remainder of the scope is conditional on that screening being satisfactory. That is a condition we apply generally, not a comment on your group.

 

Payment for the specialist workstream is typically staged, half on signature of the engagement letter and half on delivery of the first report draft, with the detail agreed in the engagement letter.

 

3. Opening balances and predecessor-auditor procedures

 

These are charged separately, and in your circumstances they are not a formality. Where we are appointed as a new auditor we are required to obtain sufficient appropriate evidence that the opening balances do not contain misstatements that materially affect the current year, and that prior-period accounting policies have been consistently applied. We would normally do that by reviewing the predecessor’s working papers, with your consent and theirs, which is considerably cheaper for you than re-performing the work.

 

The 2025 qualification changes that picture. A modification relating to a historical payable balance means the opening position on that balance has not been fully evidenced, so we cannot simply inherit it. We will need to form our own view, and if that view cannot be supported the modification may have to be carried into the 2026 opinion. That is the single largest open item in your tender, and it is worth addressing before the year end rather than during the audit.

 

4. Audit evidence over wallets and digital assets

 

Structured custody and monitoring data is helpful but it is not, by itself, audit evidence – it is management information produced by a system management selects and configures. Our approach has three layers.

 

• Integration and reconstruction. We integrate with your platforms and your accounting records through APIs and file exports, and reconcile them against the underlying on-chain record rather than against each other.
• Independent corroboration. Balances and transactions are validated against benchmarked sources and the public chain, so the evidence does not depend on the completeness of any single internal system.
• Ownership and control. We test that the company controls the wallets it reports, which is the digital-asset equivalent of a bank confirmation and the procedure most often done badly. Where hardware devices are held in Cyprus, this is usually a short in-person session in which a director signs test transactions from selected wallets in the presence of the audit and specialist teams. Nothing leaves the company’s control; the point is to demonstrate the ability to sign.

 

The specialists’ working papers and signatures form part of the auditor’s regulatory file. That is what allows the opinion to be defended to the regulator and what allows a bank, an acquirer or a group auditor to place reliance on it.

 

5. Specialist, blockchain and valuation fees

 

Yes – they are quoted separately, as the table at point 2 shows, and we think that is the right way round for a group that wants to compare tenders properly. Valuation of the company’s tokens, including thinly traded altcoins at the cut-off date, is included within that specialist quote rather than being a further charge on top of it.

 

6. The historical payable remediation

 

Yes, it can and in our view should be a separate workstream, scoped and capped, and ideally completed before the audit begins. Mixing remediation into the statutory audit blurs the line between preparing the records and auditing them, which is uncomfortable for everyone and tends to cost more. We would scope it once we have seen the prior-year file and the qualification wording.

 

7. What we need in order to quote precisely

 

• Transaction volumes for the year to date and the expected year-end position.
• The total number of wallets currently controlled by the company, including dormant and legacy addresses.
• The centralised exchange accounts the company operates.
• The networks on which the company holds or receives assets, and any further network under consideration.
• The crypto bookkeeping software and any wallet orchestration system in use.
• Details of any staking activity.
• Any token allocation schedules for tokens currently being received.
• The prior-year audit file and the wording of the 2025 qualification.

 

One closing point in your favour. The audit-ready file you describe is the single most effective thing a client can do to reduce a digital-asset audit fee, and groups that maintain one properly do see a materially lower quote than those that do not. We would want to see it before fixing the fee, so that the benefit of the work you have already done is reflected in the number rather than assumed away.

 

We are happy to arrange a call to discuss the scope, and to sign a non-disclosure agreement first. You can reach us at enquiries@cyprusaccountants.com.cy or on +357 22 336 309.

 

Kind regards,

 

---

 

Disclaimer: This article is published for general information only and reflects the position as understood at the date of publication. It does not constitute investment, tax, legal or audit advice and must not be relied upon as such. The fees referred to are indicative, relate to one particular set of facts, and are neither an offer nor a quotation nor a guarantee of any outcome; they may change. Acceptance of any audit appointment is subject to independence, anti-money-laundering and professional clearance procedures. Please obtain advice on your own circumstances before acting. For a consultation, contact enquiries@cyprusaccountants.com.cy or +357 22 336 309.