PCAOB Proposes Regulatory Compliance for Audits of Brokers and Dealers

• Date: December 15, 2010
• Source: Admin

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The board stated that its top priorities in 2011 would include broker-dealer audits, the auditor’s reporting model and foreign inspections.

Developing a broker-dealer audit inspection program will be a “formidable task,” because of the need to address the smaller broker-dealer firms, which make up the majority, stated acting chairman of the board, Daniel L. Goelzer.

Regulatory compliance implementation will create broker-dealer audits’ inspection program for the short term. However, the board is currently considering setting up permanent rules, which will be put in place in two years. The emphasis by the board was on no change to the regulation of brokers’ and dealers’ audits since the proposed regulatory compliance currently falls in the generally accepted auditing standards (GAAS) category.

Under the Dodd-Frank Act, broker-dealers, like public companies, need to pay fees to PCAOB.

The public has been given time until February 15, 2011 to comment on the proposed regulatory compliance.

Related Acts

Under Section 404(b) of the Sarbanes-Oxley (SOX) Act of 2002 (SOX Section 404(b):

PCAOB Authority

The Act provides the PCAOB full oversight authority – including inspections and enforcement actions – over the auditors of brokers and dealers.

The Act provides the PCAOB with authority to share confidential inspections and investigations information with foreign auditor oversight authorities.

The Dodd-Frank Wall Street Reform and Consumer Protection Act also expands the PCAOB’s authority to oversee auditors of all SEC-registered securities broker-dealers. Those auditors had previously been required to register with the PCAOB, but were not otherwise subject to its authority.   

http://www.aicpa.org/Publications/Newsletters/CAQAlerts/2010/DownloadableDocuments/CAQ_Alert_2010_44_07232010.pdf