PCAOB Posts 2018 Annual Report on the Broker-Dealer Interim Inspection Program

The PCAOB posted to its website today the 2018 Annual Report on the Broker-Dealer Interim Inspection Program(PDF). The report includes observations from our inspections during 2018, insights into applicable standards, and examples of effective procedures. It also includes two appendices with information about the selection of firms and engagements for inspection and historical results from our inspections under the interim program.

In 2018, we observed that the percentage of deficiencies for audit and attestation engagements remained high and continued improvement is needed. We believe significant positive impact on audit quality can be achieved if:

• Auditors focus on improving their systems of quality control;
• Auditors advance their knowledge and understanding of PCAOB standards; and
• Auditors focus on improving their performance in testing internal controls when employing controls-reliance audit strategies and for examination engagements.

The 2018 annual report has been refined to advance our goal of providing auditors and other stakeholders with information in a more accessible and useful manner. We hope this new format and approach provides a clearer view of our 2018 inspections of auditors of broker-dealers.

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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.