It has been just revealed the fact that the SEC has issued a warning to accountants, telling them not to take part in the mislabeled audits for crypto exchanges. Check out the latest reports below.
The Securities and Exchange Commission (SEC) in the United States has warned accountants to refrain from participating in misrepresented “audits” for crypto companies.
Seeking the assistance of accounting firms
The Chief Accountant of SEC, Paul Munter, claims that digital asset firms and crypto exchanges have been seeking the assistance of accounting firms to evaluate certain parts of their businesses, which they then present as “audits.”
Munter states that as accounting firms take on more non-audit work, their clients may promote and use misleading language that suggests these non-audit arrangements are comparable or even more accurate than financial statement audits.
This is not true. Non-audit arrangements are not as rigorous or comprehensive as financial statement audits, and may not provide reasonable assurance to investors.
According to Munter, it is important for accountants to keep an eye on the statements made by their clients in the crypto industry.
To ensure the integrity of financial reporting, the SEC official suggests that accounting firms should implement contractual obligations that restrict the non-auditing work that clients can discuss.
Munter warns that any circumstances that raise doubts about an accountant’s independence will be subject to increased scrutiny by the Commission.
Even a single instance of improper professional conduct by an accountant may result in sanctions under the rule.
Moreover, liability for the entire audit firm may arise from such conduct, as the firm serves a crucial role in safeguarding investor protection and public interest. The size of the audit firm does not matter, and any firm can be suspended from appearing or practicing before the Commission.
Stay tuned for more news, and make sure to check out the markets as well.
