Home Crypto Hester Pierce strikes again in opposition to SEC crypto warning to accounting companies

Hester Pierce strikes again in opposition to SEC crypto warning to accounting companies

Hester Pierce strikes again in opposition to SEC crypto warning to accounting companies


Hester Pierce, commissioner of america Securities and Alternate (SEC), has raised considerations concerning the watchdog’s latest assertion advising accounting companies in opposition to taking over non-audit work for crypto companies.

In a July 28 tweet, Pierce challenged the latest assertion made by the SEC’s chief accountant Paul Munter, proposing that accounting companies undertake an all-or-nothing method in its dealings with crypto companies. Pierce believes this may trigger crypto companies to shrink back from making good-faith efforts to be clear.

Whereas Pierce famous that crypto companies and accountants ought to guarantee transparency relating to proof of reserves, specifying what’s and is not acceptable, she questioned why accounting companies needs to be cautious of offering assurance work to crypto companies. 

“Why would we need to discourage good-faith efforts to supply extra transparency?” Pierce said in a tweet.

Munter argued that partial engagements may lead to crypto companies selectively selecting solely sure features of the enterprise to indicate accounting companies after which presenting that data as a full audit to shoppers. 

He believes that work past a full audit’s scope will lack transparency for buyers, noting:

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 form of evaluation of sure elements of their enterprise, typically offered as a purported “audit.”

In accordance with Munter, if an accounting agency discovers {that a} shopper is making deceptive statements about its non-audit work to the general public, it ought to take a agency stance and take into account making a “noisy withdrawal, disassociating itself from the shopper, together with by means of its personal public statements,” or report the agency to the SEC.

Associated: SEC enchantment might amplify Ripple win, says Ripple Labs authorized chief

Mike Shaub, an auditing and accounting ethics professor at Texas A&M College, responded to the assertion in a July 29 tweet, mentioning that auditors are obligated by confidentiality, making it difficult to make public statements like Munter recommended.

Shaub additionally highlighted the difficulty of some accounting companies aligning themselves with cryptocurrency experience to spice up their popularity however develop into unresponsive when issues come up.

Journal: SEC opinions Ripple ruling, US invoice seeks management over DeFi, and extra: Hodler’s Digest, July 16-22