PCAOB’s Report on Broker-Dealer Audit Deficiencies Points the Way for BDs to Improve Their Financial Reporting and Compliance

PCAOB’S MISSION -

For two years, the Public Company Accounting Oversight Board (PCAOB) has been reviewing the work of auditors of broker-dealers, with a view to assessing their work and enabling the PCAOB to develop a permanent program for inspection of broker-dealer audits. Last week, the PCAOB issued its second progress report on this interim inspection program. For broker-dealers, PCAOB’s report provides a useful preview of the issues on which their auditors will be increasing their focus in future audits; PCAOB’s criticisms of the auditors that it regulates will most likely cause the auditors to beef up their audits in the areas criticized, and broker-dealers are bound to feel the effects in future audits.

Broker-dealers should review the second report, the most significant findings of which are summarized below. The PCAOB found deficiencies in audit procedures related to customer protection and net capital, certain financial statement areas, and auditor independence.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.