Big four accounting firms crack down on crypto employee disclosures
Reports indicate that the Big Four Deloitte and PricewaterhouseCoopers (PwC) have asked staff to disclose their crypto holdings in their annual risk assessment procedures.
The Big Four is a term that refers to the major accounting firms Deloitte, Ernst & Young (E&Y), KPMG and PwC.
They provide audit, tax, management consulting, insurance and legal services to the world’s largest corporations and governments. This places them in a unique position when it comes to economic outlook and awareness of future trends, especially their link to digital transformation.
But what can we take away from this event?
Risk assessment and compliance
According to Economic times, Deloitte and PwC staff were asked to disclose crypto holdings of 10 ($ 0.13) or more. So far, there is no report on where E&Y and KPMG are or whether this is part of a global policy outside of India.
“Companies fear conflicts of interest if partners or a family member have purchased crypto assets, insiders said.”
It should be noted that none of the Big Four has a policy prohibiting staff from investing in digital assets. However, failure to disclose the assets could result in a fine or even dismissal of staff.
Of course, these disclosures should apply to partners and perhaps senior managers. But PwC requires all staff, even associates, to comply.
In one example, an associate was fined 25,000 ($ 330) for non-disclosure of her husband’s 10,000 ($ 130) crypto investment.
Commenting on the situation, a senior associate at one of the companies in question pointed out that crypto is primarily the preserve of younger, generally less experienced, staff.
“Most of these investments are made by leaders and younger partners, as most of the older ones stick to traditional investments like equity and real estate.”
Is this the start of an anti-crypto stance?
The legality of crypto in India is somewhat ambiguous. A court ruling banning digital currencies was subsequently reversed in March 2020. But, the government remains cautious about approving their use in India.
In the last round, a cryptocurrency bill that would clarify the matter was again postponed due to the search for a wider consultation.
A big four senior partner mentioned that staff disclosure of crypto holdings is necessary for transparency, especially since companies count the central bank and government as customers.
“But we want to be honest, because many of our projects involve working directly with the Reserve Bank of India (RBI) and the government.”
As overseers of international accounting standards, it makes sense for the Big Four to practice what they preach and enforce disclosure requirements.
However, this isolated event should not be interpreted as an anti-crypto stance by the Big Four. Instead, it appears to be a precautionary measure to avoid falling prey to Indian authorities.
However, the uncertainty surrounding the cryptocurrency bill introduces an element of confusion.
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