Sen. Elizabeth Warren (D-Mass.) and Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee, have urged the U.S. auditing watchdog, the Public Company Accounting Oversight Board (PCAOB), to take action against “sham audits” of crypto companies. The PCAOB, which is authorized and overseen by the U.S. Securities and Exchange Commission (SEC) and funded by audited public companies, acknowledged the potential problem with crypto auditing to the lawmakers. The senators believe that these sham audits have contributed to the recent stresses in the U.S. banking system, and are calling for the PCAOB to take action to prevent further issues.
PCAOB Chair Erica Williams expressed concern over the prevalence of “sham audits” of cryptocurrency companies, which fall outside of the PCAOB’s jurisdiction. Williams wrote in a February response letter that the PCAOB is limited in its ability to regulate the audits of certain cryptocurrency companies due to statutory limits. Despite this, Williams is committed to ensuring that all audits are conducted with the highest standards of integrity and accuracy.
The senators, who are on the Senate Banking Committee, argued that the board has the authority and responsibility to protect the integrity of the auditing system. They noted that the ongoing use of sham audits of crypto firms conducted by PCAOB-registered auditors mislead the public and threaten the integrity of the banking and financial systems. They urged the board to take action to protect the public from such fraudulent activities.
The U.S. audit watchdog, the Public Company Accounting Oversight Board (PCAOB), has warned that crypto companies’ reserve reports cannot be trusted. The PCAOB’s inspector general has found that these reports are often based on unreliable information and not genuine auditing. This means that investors cannot be sure of the accuracy of the data they are receiving. The PCAOB is now urging crypto companies to ensure that their reserve reports are properly audited and that investors are provided with accurate information. This is essential for the crypto sector to gain the trust of investors and to ensure that the industry is properly regulated.
