FTX Scandal prompts Senators Warren and Wyden to demand more accountability from auditing firms

In the wake of the recent implosion of cryptocurrency exchange FTX, US Senators Elizabeth Warren and Ron Wyden have called on the Public Company Accounting Oversight Board (PCAOB) to increase its oversight of auditing firms that assess cryptocurrency businesses.

In the letter which was addressed to the PCAOB, Warren and Wyden questioned why auditing companies associated with FTX did not detect the corporate mismanagement and lack of internal control measures that federal prosecutors have alleged.

The senators stated that when auditors who are registered with the PCAOB carry out fraudulent audits, even for corporations that may not be subject to the PCAOB’s authority, it can harm the PCAOB’s reputation. Armanino and Prager Metis, an auditing firm that is subject to PCAOB oversight, carried out audits of FTX prior to its collapse in November 2022.

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The PCAOB has confirmed receiving the letter and stated that it will respond directly to the senators. The organization also emphasized its commitment to working to protect investors.