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SEC Commissioner Hester Peirce says SEC’s warning to accounting companies may discourage “good-faith efforts” in the direction of transparency.
Paul Munter, the Chief Accountant at SEC, cautioned that crypto platforms are more likely to misrepresent non-audit work as full audit.
SEC Commissioner Hester Peirce has criticized a current assertion by the US Securities and Trade Fee (SEC) directed in the direction of accounting companies engaged in proof of reserves “audits” and different accounting associated work.
SEC’s tackle crypto “audit” studies
Particularly, Peirce took subject with the warning printed on July 27 by Paul Munter, the Chief Accountant within the SEC’s Workplace of the Chief Accountant (OCA). Munter had cautioned that accounting companies working with cryptocurrency ought to be cautious of the “potential pitfalls’ associated to the peace of mind work these companies undertake for crypto firms – notably crypto buying and selling platforms.
In keeping with OCA, it’s potential for crypto companies to take the non-audit work offered by accounting suppliers and supply it to clients and the general public as audits. The SEC’s chief accountant famous:
“Sure crypto asset buying and selling platforms, with others within the crypto business, have marketed to traders their retention of third events, typically accounting companies, to carry out some form of assessment of sure elements of their enterprise, typically offered as a purported “audit.””
Munter famous that options to the impact that “non-audit preparations are at parity with, or much more “exact” than, a monetary assertion audit,” have been false.
In keeping with Munter, any accounting agency that finds itself at odds with their crypto shopper over misrepresentations associated to non-audit work, has to make this recognized to the general public. They will additionally report this to the SEC, he added.
Peirce acknowledges the necessity for crypto exchanges and accounting companions should try for readability and transparency relating to their proof of reserves studies.
Nonetheless, she shouldn’t be supportive of the warning by the OCA. Discouraging this cooperation may imply mainstream accounting and audit companies preserve off crypto – more likely to the detriment of customers.
“Crypto platforms [and] their accountants ought to be clear about what proof of reserves is and isn’t & clients ought to perceive the constraints, however why would we need to discourage good-faith efforts to offer extra transparency?” she argued.
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