New PCAOB Publication Provides Auditors With Insights Related to Testing Transactions Between Broker-Dealers and Related Parties

Today, the PCAOB released a staff publication, “Broker-Dealer Audit Focus: Related Party Transactions.”

Under federal law, the PCAOB has the responsibility to oversee firms that audit broker-dealers registered with the U.S. Securities and Exchange Commission.

PCAOB staff continues to identify deficiencies related to the testing of transactions between brokers and dealers and related parties (typically parents or affiliates). This edition of Broker-Dealer Audit Focus highlights key reminders for auditors of broker-dealers from PCAOB standards related to audit procedures involving a broker-dealer’s revenue and expense transactions with related parties. It also provides the staff’s perspective on common deficiencies observed in broker-dealer inspections and shares good practices that the staff has observed.

About the Broker-Dealer Audit Focus Series

Broker-Dealer Audit Focus is a series of PCAOB publications that aims to provide easy-to-digest reminders, good practices, and other insights to auditors of registered broker-dealers. The series can be found on the Information for Auditors of Broker-Dealers page.

Additional PCAOB resources and perspectives are available on our Information for Smaller Firms, and Staff Publications pages. Auditors and others can also sign up for targeted email updates through our Communications to Auditors and Communications to Small Audit Firm Practitioners mailing lists. 

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About the PCAOB

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers registered with the Securities and Exchange Commission, including compliance reports filed pursuant to federal securities laws.