Hester Peirce Comments on SEC Chief Accountant's Warning About Crypto Audits: Moves to Improve Transparency Shouldn't Be Blocked

Odaily Planet Daily News US SEC chief accountant Paul Munter warned that accounting firms may be held legally liable for providing non-audit work for cryptocurrency companies. Accounting firms performing “audit” duties for cryptocurrency companies risk being reprimanded or suspended if their findings are misrepresented, Munter said. US SEC Commissioner Hester Peirce tweeted that although she acknowledged that cryptocurrency companies and their accountants should clarify the proof of reserves, she believes that good-faith efforts to provide greater transparency in the cryptocurrency field should not be blocked. (Cryptoslate) As previously reported, Paul Munter, chief accountant of the U.S. Securities and Exchange Commission (SEC), reminded accounting firms to keep obligations and risks in mind when working with cryptocurrency companies. Paul Munter said that cryptocurrency companies may hire accountants "to perform some form of review of some part of their business, usually in the form of a so-called 'audit,'" and wrongly described the job as equivalent to a financial statement audit . Doing so would not only be misleading but could result in legal liability and accountants should act with integrity in their conduct and activities, including ensuring that the accountant's name or services are not used to convey false legitimacy or mislead investors. Under the Securities Exchange Act of 1934, accounting firms have a legal obligation to detect illegal activity and report it to the SEC, Munter said. A "material misstatement" by an accountant or his client could violate the Securities Exchange Act and the Securities Act of 1933, leading to reprimand or bankruptcy of the firm, which also applies to individuals.