Background

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 vested the PCAOB with expanded oversight of the auditors of brokers and dealers registered with the U.S. Securities and Exchange Commission.  The PCAOB has registration, inspection, standard-setting, and disciplinary authority over the auditors of broker-dealers.

When broker-dealers file their annual reports with the SEC, they are required to include their financial statements and supporting schedules, along with audit reports thereon prepared by PCAOB-registered public accounting firms.

Broker-dealers also are required to file compliance or exemption reports, along with examination or review reports that are prepared by the same firms that prepared the audit reports. The audits, examinations, and reviews are required to be performed in accordance with PCAOB standards.  

Inspections

The Dodd-Frank Act authorized the PCAOB to establish, by rule, an inspection program for auditors of broker-dealers.

The law leaves to the Board, subject to the approval of the SEC, important questions concerning the scope of the program and the frequency of inspections, including whether to differentiate among categories of broker-dealers, and whether to exclude any categories of auditors.

In June 2011, the PCAOB established an interim program to inspect these auditors and identify and address with them any significant issues idenfitied in their audits and related attestation engagements.

PCAOB publishes a summary inspection report each year.

The PCAOB also periodically publishes staff inspection briefs on topics of interest to broker-dealer auditors.

Enforcement

The PCAOB exercises its enforcement authority, where appropriate, on audit, attestation, independence, and other deficiencies identified in the audits of broker-dealers.

The Board has instituted disciplinary actions against auditors of broker-dealers, including proceedings that resulted in public enforcement orders that imposed sanctions, such as revoking the registration of firms, barring individuals from associating with a registered firm, and imposing civil money penalties on firms and individuals. 

Recent Settled Orders

Search all settled orders.

Standards and Staff Guidance

All audits and related attestation engagements of broker-dealers for fiscal years ended on or after June 1, 2014, are required to be performed in accordance with PCAOB standards.

PCAOB standards and staff guidance of specific relevance to auditors of broker-dealers include:

Other Releases and Guidance

The PCAOB has published releases and guidance that describe and clarify requirements for audits and attestation engagements of broker-dealers.

The SEC has published releases and FAQs that describe the amendments to the reporting requirements for broker-dealers, and the SEC financial responsibility rules.

Outreach

The Board is committed to outreach to auditors of broker-dealers.

The PCAOB live-streams and hosts one-day forums around the country. Topics include PCAOB inspection findings, compliance with standards, enforcement matters, and other issues specific to these audits.

The PCAOB also hosts webinars on specific topics of interest to broker-dealer auditors.

Forums and webinars are offered at no cost and provide CPE credit. You can read about past forums and webinars on our website.