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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 latest 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” experiences
Specifically, 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 reassurance work these companies undertake for crypto corporations – notably crypto buying and selling platforms.
In response to OCA, it’s attainable for crypto companies to take the non-audit work introduced by accounting suppliers and provide 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 buyers their retention of third events, typically accounting companies, to carry out some type of evaluate of sure components of their enterprise, typically introduced as a purported “audit.””
Munter famous that recommendations 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 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 with regards to their proof of reserves experiences.
Nevertheless, she shouldn’t be 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 customers.
“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 wish to discourage good-faith efforts to supply extra transparency?” she argued.
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