A multi-entity crypto trading and custody platform operating across the United States and international jurisdictions faced recurring audit qualifications driven by complex accounting judgments. The company processed high volumes of digital asset transactions, maintained customer custody balances, and operated a regulated trust company subsidiary, all within a rapidly evolving regulatory environment.
Challenges
Key challenges included:
- Revenue recognition complexity under ASC 606, particularly principal versus agent determinations for crypto trade execution across exchanges, OTC desks, and market makers
- Classification and presentation of crypto-related gains and losses, including realized versus unrealized components and embedded derivative impacts
- Internal-use software development costs that were expensed rather than capitalized under ASC 350-40, creating audit risk and balance sheet distortion
- Multi-entity consolidation across operating companies, a regulated trust entity, and international subsidiaries
- Increased audit scrutiny due to recurring qualified opinions tied to judgment-heavy GAAP interpretation areas
These issues created uncertainty for management, auditors, and financial statement users, particularly around revenue transparency, earnings volatility, and long-term asset valuation.
Our Approach
Ridgeway Financial Services experts provided CFO Advisory and technical accounting support focused on strengthening financial reporting clarity, audit readiness, and documentation in high-risk accounting areas.
Our approach included:
- Acting as a strategic finance partner to management, providing CFO-level guidance on accounting judgments, audit risk, and financial statement presentation
- Supporting detailed analysis of ASC 606 principal versus agent considerations, aligned to the company’s crypto execution model and contractual arrangements
- Assisting with the evaluation and classification of crypto gains and losses to improve transparency around performance drivers and volatility
- Advising on internal-use software capitalization frameworks, including identifying capitalizable phases, documentation requirements, and audit expectations
- Supporting multi-entity consolidation processes, intercompany alignment, and consistent GAAP application across domestic and international entities
- Preparing audit-ready schedules, reconciliations, and support to address recurring qualified opinion themes and improve dialogue with external auditors
The focus was not on retroactively rewriting history, but on helping management understand risks, strengthen positions, and move toward more defensible, audit-ready financial reporting.
Outcomes
As a result of this engagement:
- Management gained clearer visibility into the drivers behind recurring audit qualifications and the steps required to mitigate future risk
- Financial reporting became more consistent and transparent across entities, particularly in crypto custody, revenue, and gain and loss presentation
- Audit discussions shifted from reactive issue resolution to proactive evaluation of accounting judgments and documentation
- The finance function advanced toward greater maturity, supporting both operational decision-making and external reporting expectations
- The organization was better positioned to address evolving regulatory, investor, and auditor scrutiny in the digital asset space
While qualified opinions were driven by complex GAAP interpretation areas, the engagement strengthened the company’s ability to navigate these challenges with greater confidence and structure.
Why This Case Matters
Crypto, fintech, and digital asset companies often face audit qualifications not because of weak bookkeeping, but because GAAP has not fully caught up with novel business models. Revenue recognition, digital asset accounting, and software capitalization require judgment, documentation, and industry-specific expertise.
This case demonstrates how CFO Advisory and technical accounting support can help management:
- Understand and manage audit risk in judgment-heavy accounting areas
- Improve financial statement clarity without overstating outcomes
- Build credibility with auditors, investors, and regulators
- Mature finance operations without prematurely scaling internal teams
Services Provided
- Fractional CFO Advisory
- Technical accounting support under US GAAP
- Audit readiness and auditor support
- ASC 606 revenue recognition advisory
- Crypto and digital asset accounting
- Internal-use software capitalization guidance
- Multi-entity and international consolidation support
- Finance team augmentation and reporting support
Interested in Similar Support?
Ridgeway Financial Services works with crypto, fintech, SaaS, and high-growth technology companies facing complex accounting, audit, and regulatory challenges.
If your organization is navigating audit qualifications, technical accounting complexity, or scaling finance operations, our team can help you build clarity, confidence, and audit-ready financial reporting.