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Paul Munter, chief accountant of the United States Securities Exchange Commission (SEC), has released a statement warning accounting firms of their obligations to the agency when working with crypto firms. Allowing their finding to be misrepresented could have serious consequences, he said. \u00a0\u00a0<\/p>\n
Crypto firms may engage accountants to \u201cperform some sort of review of certain parts of their business, often presented as a purported \u2018audit\u2019\u201d and falsely present the work as being comparable to a financial statement audit, Munter wrote. Doing so is not only misleading, butit can have legal liability.<\/p>\n
Related: Binance proof-of-reserves removed from the auditor’s site<\/em><\/strong><\/p>\n Accounting firms have a legal obligation under the Securities Exchange Act of 1934 to look for illegal activities and report them to the SEC, Munter continued. \u201cMaterial misstatement\u201d by accountants or their clients could violate both the Securities Exchange Act and the Securities Act of 1933, resulting in censure or suspension of the firm. Those provisions can also be applied to individuals. <\/p>\n Munter advised accounting firms to consider these issues during client onboarding and to consider contractual prohibitions on certain language. In response to misleading statements, the position of the SEC Office of the Chief Accountant is:<\/p>\n \u201cAs best practice, the accounting firm should consider making a noisy withdrawal, disassociating itself from the client, including by way of its own public statements, or, if that is not sufficient, informing the Commission.\u201d<\/p><\/blockquote>\n The accounting firm\u2019s independence is vital, Munter continued, and even the appearance of a mutual interest or conflict of interest in its public statements could be enough to have the firm suspended from \u201cthe privilege of appearing or practicing before the Commission.\u201d <\/p>\n Want to hear perspectives from the SEC Office of the Chief Accountant? Listen to our latest podcast with guest speaker SEC Chief Accountant Paul Munter for insights on accounting and audit hot topics. #KPMGFRV<\/a> #SEC<\/a> #audit<\/a> https:\/\/t.co\/a2MsEjOvbR<\/p>\n\n