PCAOB Issues Guidance for Broker-Dealer Auditors
BrokerDealer.com/blog update courtesy of extracts from accountingtoday’s news article
The Public Company Accounting Oversight Board (PCAOB) has released staff guidance to help auditors of brokers and dealers registered with the Securities and Exchange Commission to plan and perform audits in accordance with PCAOB standards as mandated by the Dodd-Frank Act and SEC rules.
T he Dodd-Frank Act amended the Sarbanes-Oxley Act to, among other things, give the PCAOB oversight authority for the audits of broker-dealers registered with the SEC.
“To enhance investor protection, broker-dealer auditors must now meet PCAOB requirements,” said PCAOB chairman James R. Doty in a statement. “This guidance is tailored to help auditors of smaller broker-dealers develop a cost-effective, scaled approach to their audits.”
Last year, the SEC revised Exchange Act Rule 17a-5 to entail, among other things, audits of broker-dealers was conducted in accordance with PCAOB standards. In October, the PCAOB implemented an auditing standard along with two attestation benchmarks that apply to broker-dealer audits. Then in February, the SEC issued an order to take approval from the PCAOB’s new auditing and attestation standards for the audits of brokers and dealers.
The amendments of SEC and standards of PCAOB are effective for fiscal years ending on or after June 1, 2014. Former to the effective date, those broker-dealer audits were taken under general auditing standards.
In order to help auditors with the transition, the staff guidance helps to find relevant requirements for SEC-registered brokers and dealers audits, attestation processes, and provides helpful insights on the application of PCAOB standards to these processes. Furthermore, the publication shows up major prerequisites of SEC Rule 17a-5 and PCAOB standards.
“Auditors of broker-dealers are now subject to new requirements, including the requirement to apply PCAOB standards,” said PCAOB chief auditor Martin F. Baumann. This publication discusses how audits can be scaled, based on the size and complexity of the broker-dealer, to apply PCAOB standards and fulfill their important role of helping to protect customers of broker-dealers.”
Publication is available at PCAOB’s official website