Million

Elon Musk

SEC Commissioner Hester Pierce has voiced concerns over a recent statement by the agency advising accountants to refrain from non-audit work for cryptocurrency firms. 
Pierce countered the suggestion made by the SEC’s chief accountant, Paul Munter, that accountants should adopt a binary approach when dealing with crypto companies. 
Pierce fears that Munter’s proposal could deter crypto businesses from making sincere efforts to be transparent. 
While she supports transparency, particularly regarding proof of reserves, Pierce is skeptical about why accounting firms should be wary of assuring crypto firms. 
Pierce took to Twitter, questioning, “Why would we want to discourage good-faith efforts to provide more transparency?” 
She raised her concerns about the potential chilling effect this may have on the transparency initiatives of crypto firms. 
Munter argued that fractional engagements could lead crypto firms to selectively disclose certain business aspects as a complete audit to clients. 
This practice, according to him, would lack transparency for investors. 
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In Munter’s view, some crypto firms misleadingly market their retention of third-party reviewers, sometimes accounting firms, as conducting an “audit.” 
He suggested that if an accounting firm finds its client making false statements about non-audit work, it should consider making a public statement or reporting the client to the SEC, a process he termed a “noisy withdrawal.” 
Reacting to Munter’s statement, Mike Shaub, an auditing and accounting ethics professor at Texas A&amp;M University, underscored the difficulty for auditors to make public statements given their confidentiality obligations. 
He also raised concerns about some accounting firms leveraging their crypto expertise to enhance their reputations, yet becoming unresponsive when issues surface. 
As this debate continues, the delicate balance between crypto firm transparency, the role of accounting firms, and investor protection remains a critical issue for the SEC and the broader industry. 
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SEC Commissioner Hester Pierce Questions Agency’s Advisory Against Non-Audit Work for Crypto Firms

Crypto Intelligence

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