Well in it: Prager Metis, private equity, and Autodesk
Well in it: Prager Metis, private equity, and Autodesk
Getting back to tickety-boo here and catching up on all the stories while I was over yonder.
University of Cambridge Executive Master of Accounting Programme and Professor Michael Willis put out some nice photos and messages from our class at Cambridge last week.
I had the profound pleasure of seeing the actual village where one of my favorite shows, Grantchester, is filmed. I walked the hour across Grantchester Meadows, and took a look at the church, the vicarage, and had a great shepherd’s pie at one of the pubs!
FTX and Prager Metis
While I was in Cambridge I got a call from Coindesk asking me to write about the SEC's settlement with Prager Metis for FTX, a subject I have been following closely and one the Cambridge crew had been very interested in!
I was in a different time zone and booked solid so I thought it was a great chance for Hofstra's Professor Jack Castonguay to show his stuff. I suggested that he write it. He, off course, did a great job. I highly recommend it.
FTX’s Downfall Couldn’t Have Happened Without SBF’s Fraud – Or Prager Metis’ Audit Failure
FTX’s auditor recently agreed to settle misconduct charges with the SEC. Jack Castonguay says auditors working with the crypto industry should take notice.
By Jack Castonguay, Sep 23, 2024
Auditing standards require at a minimum that auditors understand the entity and its environment, that it has the competency and independence to perform the audit, and that it can’t effectively staff the audit, among other things. These standards apply whether the audit client is a first-time client, a small local thrift shop, or a multibillion-dollar cryptocurrency exchange with a related party trading firm.
Prager Metis, which is based in New York, rushed into the latter space with abandon. The firm was the first to announce a metaverse headquarters in Decentraland. The firm took on FTX as a client. It apparently wanted to be seen as the accounting firm of the future. And yet, as the SEC has charged, it lacked the basic understanding and competency to audit the industry.
My take? Despite the harsh words from the SEC, Prager Metis got off very lightly on the FTX case and a separate set of allegations regarding its prolific use of indemnification clauses in its engagement letters. That's a big no-no! What a nice two-fer for the SEC to clear off its desk. I anxiously await the bon-bons it's going to throw at Armanino, if any. If it were up to me...