Hester Peirce criticizes SEC’s warning to accounting corporations working with crypto

SEC Commissioner Hester Peirce says SEC’s warning to accounting corporations might 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 Alternate Fee (SEC) directed in the direction of accounting corporations engaged in proof of reserves “audits” and different accounting associated work.

SEC’s tackle crypto “audit” reviews

Particularly, Peirce took concern 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 corporations working with cryptocurrency ought to be cautious of the “potential pitfalls’ associated to the peace of mind work these corporations undertake for crypto corporations – notably crypto buying and selling platforms.

In accordance with OCA, it’s potential for crypto corporations to take the non-audit work introduced 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 trade, have marketed to buyers their retention of third events, typically accounting corporations, to carry out some kind of evaluation of sure elements of their enterprise, usually introduced as a purported “audit.””

Munter famous that strategies to the impact that “non-audit preparations are at parity with, or much more “exact” than, a monetary assertion audit,” had been false.

In accordance with Munter, any accounting agency that finds itself at odds with their crypto consumer 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 try for readability and transparency in relation to their proof of reserves reviews. 

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

“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.