FTX US’s Auditor Supports Its Accounting Work on the Collapsed Exchange

• Armanino, FTX’s US auditor, defended its accounting work. 
• “We were never engaged for audit internal controls,” stated the company’s chief operational officer to the FT.
• Armanino has stopped auditing and proofs of reserve work. It is currently facing a lawsuit by FTX customers.

Armanino is the US auditor for FTX. This was the Chief Operating Office of the firm, who told the Financial Times in an Interview that he stands by the firm’s accounting work on the crypto exchange. 

Chris Carlberg, Armanino chief operating officers, stated that “We stand by the FTX US work.” Financial TimesFriday. After reviewing its finances in 2020-2021, Armanino gave FTX a clean bill. It is well-known for providing proof of reserve reports to crypto firms and is a top provider of such reports, according to the FT.

“A few industry voices suggested we should have done a better job of auditing internal control, but we were never hired to audit internal control.” It happens with public companies. Carlberg stated that it is not required by the standards of private company audits.

This comes just a month following the implosion of FTX amid “significant” liquidity problemsDeclared bankruptcy, which led to numerous accounting scandals in the crypto exchange. This event drew attention from regulators and law enforcement. The exchange had no in-housing accounting department, shelled out millions on Bahamian vacation properties, commingled customer fundsAlameda Research is Sam Bankman Fried’s crypto trading arm.

Carlberg said that the firm’s auditors didn’t get tapped to inspect internal controls at FTX. Carlberg added that private corporations don’t need to audit internal operations. 

John Ray III, FTX’s new CEO, has said that FTX had a “complete failure of corporate controls and such a complete absence of trustworthy financial information” – something critics say should have been a red flag to auditors. Ray pointed out that the FTX had a “complete failure of corporate controls and such a complete absence of trustworthy financial information” during a congressional hearing. multibillion-dollar crypto exchange used QuickBooksTo manage its finances and approved invoices via Slack. 

FTX International’s auditors, Prager Metis (Armanino) and Prager Metis (Praker Metis), are being sued by FTX customers. Carlberg didn’t comment on the lawsuit but said that Armanino stopped auditing and issued proof of reserve services because of changing “market conditions”.

Commentators claim that the industry is suffering because of a transparency problemCustomers need stricter protections from regulators. The Securities and Exchange Commission has been criticized by lawmakers current approach to crypto regulationThey feel that they have been too hands-off with the matter.