Hester Pierce strikes back against SEC crypto warning to accountants
Hester Pierce, commissioner of the United States Securities and Exchange (SEC), has raised concerns about the watchdog's recent statement advising accounting firms against taking on non-audit work for crypto clients.
In a July 28 tweet, Pierce questioned the recent statement made by the SEC's chief accountant, Paul Munter, warning accounting firms against engaging in assurance work for crypto platforms outside the scope of a full financial audit. She suggested that this approach to improve transparency might actually lead to hindering sincere efforts from crypto platforms.
“Why would we want to discourage good-faith efforts to provide more transparency?” Pierce stated.
Crypto platforms & their accountants should be clear about what proof of reserves is and isn't & customers should understand the limitations, but why would we want to discourage good-faith efforts to provide more transparency? https://t.co/fsuxUGPrrb
Munter stated that such practise might result in crypto firms selectively choosing only certain aspects of the business to show accounting firms and then presenting that information as a full audit to clients. He believes that work beyond a full audit's scope will lack transparency for investors.
"Non-audit arrangements are neither as rigorous nor as comprehensive as a financial statement audit, and may not provide any reasonable assurance to investors" Munter stated
According to Munter, if an accounting firm discovers that a client is making misleading statements about its non-audit work to the public, it should take a firm stance and treat it seriously. He noted:
Related: SEC appeal could amplify Ripple win, says Ripple Labs legal chief
Mike Shaub, an auditing and accounting ethics professor at Texas A & M
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