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

Why the evolution of ETFs is changing the due diligence equation
Why the evolution of ETFs is changing the due diligence equation

As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.

Most asset managers are using AI, but few let it call the shots
Most asset managers are using AI, but few let it call the shots

Survey finds AI widely embedded in research and analysis, but barely touching portfolio construction or trade execution.

LPL, Raymond James score fresh recruits in advisor recruiting battle
LPL, Raymond James score fresh recruits in advisor recruiting battle

Two firms land teams managing more than $1.1 billion in combined assets from Kestra and Edward Jones.

Edward Jones facing more race bias claims in new lawsuit
Edward Jones facing more race bias claims in new lawsuit

A private partnership, Edward Jones is a giant in the retail brokerage industry with more than 20,000 financial advisors.

Advisor moves: LPL recruitment momentum continues with $815M Northwestern Mutual team
Advisor moves: LPL recruitment momentum continues with $815M Northwestern Mutual team

Meanwhile, Raymond James and Tritonpoint Partners separately welcomed father-son teams, including a breakaway from UBS in Missouri.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management