Hester Peirce criticizes SEC warning to accounting companies

SEC Commissioner Hester Peirce says SEC’s warning to accounting companies may discourage “good-faith efforts” in 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 latest assertion by the US Securities and Change Fee (SEC) directed in direction of accounting companies engaged in proof of reserves “audits” and different accounting associated work.

SEC’s tackle crypto “audit” reviews

Particularly, Peirce took subject 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 needs to be cautious of the “potential pitfalls’ associated to the reassurance work these companies undertake for crypto firms – significantly crypto buying and selling platforms.

In response to OCA, it’s potential for crypto companies to take the non-audit work introduced 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 type of evaluation of sure elements of their enterprise, usually introduced as a purported “audit.””

Munter famous that solutions 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 consumer over misrepresentations associated to non-audit work, has to make this recognized 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 in relation to their proof of reserves reviews. 

Nonetheless, she isn’t supportive of the warning by the OCA. Discouraging this cooperation may imply mainstream accounting and audit companies maintain off crypto – more likely to the detriment of shoppers.

“Crypto platforms [and] their accountants needs to be clear about what proof of reserves is and isn’t & prospects ought to perceive the restrictions, however why would we wish to discourage good-faith efforts to offer extra transparency?” she argued.