Forensic Accounting in the Digital Asset Era: A Structured Framework for Bitcoin Verification and Investigation

The rise of blockchain-based digital assets presents significant challenges for auditors tasked with ensuring compliance with the International Standards on Auditing. Traditional audit methods are often ill-equipped to address the decentralised, pseudonymous and cryptographically complex nature of the asset class. This study develops an Assertion-based Audit Framework as a structured audit artefact tailored to the technical attributes of the Bitcoin blockchain. Using a methodology embedded in the design sciences paradigm, this research applied an elaborated Action Design Research approach to iteratively design and validate the audit framework in collaboration with industry professionals. It translates blockchain protocol features, such as unspent transaction outputs, public and private key cryptography, and decentralised ledger systems into assertion-level audit procedures covering existence, rights and obligations, completeness, valuation, accuracy, occurrence and cut-off. As illustrated in the simulated context, the envisaged audit framework aims to provide reliable and reproducible evidence, thereby strengthening the audit quality and forensic investigations involving bitcoin. This research advances both academic and professional knowledge by offering a formalised, technology-integrated audit framework, with broader implications for auditing digital assets across various blockchain protocols – supporting both regulatory-compliant financial audits and forensic investigations conducted where robust and verifiable evidence is essential.