Watchdog proposes Dodd-Frank standards for B-D audits

Accounting firms would have to consider how much risk their clients take when auditing brokerage firms under rules proposed by the Public Company Accounting Oversight Board.
JAN 11, 2012
Accounting firms would have to consider how much risk their clients take when auditing brokerage firms under rules proposed by the industry's new watchdog. The proposal from the Public Company Accounting Oversight Board comes a month after the nonprofit corporation established an inspection program for auditors of broker-dealers under terms of the 2010 Dodd-Frank financial reform act. “It would require auditors to use judgment to identify and focus on matters that are most important to the customer-protection objectives,” said PCAOB Chairman James R. Doty, in a statement. The proposed standards are open for a two-month public comment period. A final version would be adopted only if the Securities and Exchange Commission, which oversees the PCAOB, approves its own rule proposed last month to beef up disclosure requirements for broker-dealers who hold clients' funds. “The broker-dealer community is very diverse, and the business models and risk profiles of the roughly 5,000 registered broker-dealer firms vary,” said Daniel Goelzer, a member of the audit board. “The proposals recognize that reality. They are explicitly risk-based and are intended to be scalable to firms of different types and sizes.” Also today, the PCAOB proposed standards for auditor reviewing supplemental information a company files with its financial statements. Quarterly earnings announcements sometimes are accompanied by longer, more detailed financial tables that go beyond the standard income statement and balance sheet, offering information that some investors would consider material. --Bloomberg News--

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.