SEC Commissioner Hester Peirce says SEC’s warning to accounting companies might discourage “good-faith efforts” in direction of transparency.
Paul Munter, the Chief Accountant at SEC, cautioned that crypto platforms are prone to misrepresent non-audit work as full audit.
SEC Commissioner Hester Peirce has criticized a latest assertion by the US Securities and Trade Fee (SEC) directed in direction of accounting companies engaged in proof of reserves “audits” and different accounting associated work.
SEC’s tackle crypto “audit” studies
Particularly, Peirce took problem with the warning revealed 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 corporations – significantly crypto buying and selling platforms.
In response to OCA, it’s doable for crypto companies to take the non-audit work offered by accounting suppliers and supply it to prospects 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, generally accounting companies, to carry out some kind of evaluate of sure components 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 response to Munter, any accounting agency that finds itself at odds with their crypto shopper over misrepresentations associated to non-audit work, has to make this identified to the general public. They’ll additionally report this to the SEC, he added.
Peirce acknowledges the necessity for crypto exchanges and accounting companions should attempt for readability and transparency on the subject of their proof of reserves studies.
Nonetheless, she isn’t supportive of the warning by the OCA. Discouraging this cooperation might imply mainstream accounting and audit companies hold off crypto – prone to the detriment of shoppers.
“Crypto platforms [and] their accountants ought to be clear about what proof of reserves is and isn’t & prospects ought to perceive the restrictions, however why would we need to discourage good-faith efforts to supply extra transparency?” she argued.
