In a recent move that has drawn attention, United States Securities and Exchange Commissioner (SEC), Hester Pierce, has spoken out against the SEC’s announcement that it discourages accounting firms from engaging in non-audit work for cryptocurrencies.
Pierce vented her misgivings about the SEC’s standpoint in a tweet posted on July 28. She questioned the implications of an all-or-nothing attitude suggested by SEC’s chief accountant Paul Munter, suggesting it could discourage cryptocurrency firms from endeavors towards increased transparency.
Rooting for verifiability from both crypto companies and accounting agencies, Pierce emphasized that defining what’s permissible and what isn’t is essential. However, she also raised doubts about why accounting companies should shy away from providing assurance jobs to crypto businesses.
She questioned, “Why would we want to discourage good-faith efforts to provide more transparency?” in her tweet.
Munter contended that semi-engagement might enable crypto businesses to unveil selective company aspects to accountancy firms, portraying it as a full audit to clients. Furthermore, he cautioned that any work beyond full-audit boundaries will lack investor transparency.
Munter suggested that the accountancy firm publicly dissociate itself from the client by making a statement or reporting to the SEC if they find the client making deceiving statements about their non-audit work.
On the other hand, Mike Shaub, a professor of auditing and accounting ethics at Texas A&M University, argues that the ethic of confidentiality may make it difficult for auditor firms to make public statements like those suggested by Munter.