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 firms.
In a July 28 tweet, Pierce challenged the recent statement made by the SEC’s chief accountant Paul Munter, proposing that accounting firms adopt an all-or-nothing approach in its dealings with crypto firms. Pierce believes this might cause crypto firms to shy away from making good-faith efforts to be transparent.
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
While Pierce noted that crypto firms and accountants should ensure transparency regarding proof of reserves, specifying what is and isn’t acceptable, she questioned why accounting firms should be cautious of providing assurance work to crypto firms.
“Why would we want to discourage good-faith efforts to provide more transparency?” Pierce stated in a tweet.
Munter argued that partial engagements 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, noting:
Certain crypto asset trading platforms, with others in the crypto industry, have marketed to investors their retention of third parties, sometimes accounting firms, to perform some sort of review of certain parts of their business, often presented as a purported “audit.”
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 consider making a “noisy withdrawal, disassociating itself from the client, including by way of its own public statements,” or report the firm to the SEC.
Mike Shaub, an auditing and accounting ethics professor at Texas A&M University, responded to the statement in a July 29 tweet, mentioning that auditors are obligated by confidentiality, making it challenging to make public statements like Munter suggested.
The recent trend has been to take credit as being cutting edge (e.g., specializing in SPACs or crypto or whatever) to raise the profile, then to be low profile when things go south. That may have triggered SEC interest as well. If the auditor is silent in these cases, beware. 2/2
Shaub also highlighted the issue of some accounting firms aligning themselves with cryptocurrency expertise to boost their reputation but become unresponsive when problems arise.
Canterbury MP Rosie Duffield has resigned from the Labour Party.
The 53-year-old MP is the first to jump ship since the general election and in her resignation letter criticised the prime minister for accepting thousands of pounds worth of gifts.
She told Sir Keir Starmer the reason for leaving now is “the programme of policies you seem determined to stick to”, despite their unpopularity with the electorate and MPs.
In her letter she accused the prime minister and his top team of “sleaze, nepotism and apparent avarice” which are “off the scale”.
“I’m so ashamed of what you and your inner circle have done to tarnish and humiliate our once proud party,” she said.
Since December 2019, the prime minister received £107,145 in gifts, benefits, and hospitality – a specific category in parliament’s register of MPs’ interests.
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Ms Duffield, who has previously clashed with the prime minister on gender issues, attacked the government for pursuing “cruel and unnecessary” policies as she resigned the Labour whip.
She criticised the decision to keep the two-child benefit cap and means-test the winter fuel payment, and accused the prime minister of “hypocrisy” over his acceptance of free gifts from donors.
“Since the change of government in July, the revelations of hypocrisy have been staggering and increasingly outrageous,” she said.
“I cannot put into words how angry I and my colleagues are at your total lack of understanding about how you have made us all appear.”
Ms Duffield also mentioned the recent “treatment of Diane Abbott”, who said she thought she had been barred from standing by Labour ahead of the general election, before Sir Keir said she would be allowed to defend her Hackney North and Stoke Newington seat for the party.
Her relationship with the Labour leadership has long been strained and her decision to quit the party comes after seven other Labour MPs were suspended for rebelling by voting for a motion calling for the two-child benefit cap to be abolished.
“Someone with far-above-average wealth choosing to keep the Conservatives’ two-child limit to benefit payments which entrenches children in poverty, while inexplicably accepting expensive personal gifts of designer suits and glasses costing more than most of those people can grasp – this is entirely undeserving of holding the title of Labour prime minister,” she said.
Ms Duffield said she will continue to represent her constituents as an independent MP, “guided by my core Labour values”.