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Attestation Standard No. 1

Examination Engagements Regarding Compliance Reports of Brokers and Dealers

Appendix B—Considerations for Brokers and Dealers with Multiple Divisions or Branches

B1.     When the broker or dealer has multiple divisions or branches, the auditor should determine the extent to which he or she should perform examination procedures at selected divisions or branches to obtain sufficient appropriate evidence to support the conclusions expressed in the auditor's examination report. This includes determining the divisions or branches at which to perform examination procedures, as well as the nature, timing, and extent of the procedures to be performed at those individual divisions or branches. In determining the extent of the examination procedures to be performed, the auditor should take into account:

  1. The degree to which the financial responsibility rules relate to activities at the division or branch level;
  2. The nature and significance of the related assets, transactions, or activities at the division or branch to the financial responsibility rules;
  3. The degree of centralization of records or information processing relevant to the financial responsibility rules; and
  4.  The degree and effectiveness of management supervision and monitoring of the relevant activities of the division or branch.