Analysis of the trading volume of a cryptocurrency exchange in the global market for audit purposes

Diak Oleh
Postgraduate student of the audit department, Vadym Hetman Kyiv National Economic University, Kyiv, Ukraine, E-mail:olegd1997@gmail.com, ORCID ID: https://orcid.org/0000-0003-0249-924X

Cite this article:

Diak O. (2024) Analysis of the trading volume of a cryptocurrency exchange in the global market for audit purposes. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Analiz torgovogo objemu kryptovaljutnoi birzhi v umovah globalnogo rynku dlja potreb audytu; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odesa National Economic University (ISSN 2313-4569), Odesa National Economics University, Odesa, No. 11 (324), pp.23-30.

Abstract

The study aims to examine analytical procedures used in the audit of cryptocurrency exchanges, focusing on verifying exchange revenue derived from trading commissions. Specifically, the study analyzes the trading volume of a selected cryptocurrency exchange to ensure it aligns with general trends in the global cryptocurrency market, serving as a key indicator for confirming revenue adequacy. To verify trading commissions, market data such as total trade volume in BTC, market capitalization, volatility, and average price were collected. Daily data on the exchange's BTC trading volume was aggregated, and correlation analysis between exchange trading volume and global market data was conducted. Regression models were developed to quantify the relationship between the exchange's trading volume and broader market indicators, assessing model adequacy through statistical tests such as the Fisher F-test and Student’s t-test. The analysis confirmed the adequacy of the revenue derived from trading commissions, as the correlation and regression models showed consistent alignment between the exchange’s BTC trading volume and global market trends. The highest determinant factor influencing the exchange’s trading volume was BTC’s maximum daily volatility. The model demonstrates a 75% determination coefficient, confirming its statistical significance. This model simplifies the audit process by offering a reliable method for confirming the revenue of cryptocurrency exchanges based on trading volume trends. As an analytical tool, it reduces the need for detailed verification of large datasets, supporting auditors in mitigating risks of revenue inflation. This procedure could be integral to auditing cryptocurrency exchanges, facilitating regulatory compliance and enhancing financial reporting transparency.

Keywords

audit, analytical procedures, crypto-exchange, cryptocurrencies, income, trading commissions, trading volume, Bitcoin, volatility, regression model.

JEL classification:G120; M420; C580;DOI: https://doi.org/10.32680/2409-9260-2024-11-324-23-30

UD classification:336.7:657

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