SEC Commissioner, Hester Peirce, Fires Back at the SEC

Hester Pierce, a Commissioner of the United States Securities and Exchange Commission (SEC), is worried about the SEC's recent advice to accounting firms not to do non-audit work for crypto companies.

In a tweet on July 28, Pierce disagreed with Paul Munter, the SEC's chief accountant. Munter had suggested that accounting firms should only fully commit to or stay away from crypto companies. Pierce thinks this could discourage crypto firms from trying to be open and clear.

Pierce agrees that crypto firms and accountants should make sure they provide clear information about their reserves. However, she doesn't understand why accounting firms should be wary of doing assurance work for crypto firms. She asked in a tweet, “Why would we want to discourage good-faith efforts to provide more transparency?”

Munter believes that if crypto firms only choose some parts of their business to show to accounting firms, it could lead to a lack of transparency for investors. He thinks that any work beyond a full audit will not be transparent enough.

Munter says if an accounting firm finds out that a client is giving misleading information about its non-audit work, it should publicly distance itself from the client or report the crypto company to the SEC.

Mike Shaub, a professor of auditing and accounting ethics at Texas A&M University, responded to Munter's statement in a tweet. He pointed out that auditors must keep information confidential, which makes it hard to make public statements as Munter suggested. Shaub also mentioned the problem of some accounting firms using their connection to cryptocurrency to improve their reputation, but then not responding when issues occur.