Proposal would mean less oversight for some B-D auditors

An amendment to legislation to be considered today by the House Rules Committee could exempt accounting firms that audit certain broker-dealers from having to register with the Public Company Accounting Oversight Board.
DEC 10, 2009
An amendment to legislation to be considered today by the House Rules Committee could exempt accounting firms that audit certain broker-dealers from having to register with the Public Company Accounting Oversight Board. The amendment to the Wall Street Reform and Consumer Protection Act of 2009 (HR 4173), offered by Rep. Paul Kanjorski, D-Pa., chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, and Rep. Scott Garrett, R-N.J., the subcommittee’s ranking minority member, would give the PCAOB the discretion to write rules that could exempt auditors of introducing broker-dealers. If the board were to exempt auditors from introducing broker-dealers, those accountants would face less regulation than they do presently. Under current Securities and Exchange Commission rules, auditors of introducing broker-dealers must register with the PCAOB, but the oversight board does not have full regulatory authority to inspect or discipline those auditors. The legislation currently pending would require auditors of all broker-dealers to be fully regulated by the PCAOB. Small broker-dealers who do not hold custody of client assets have strongly opposed the provision, arguing that it would greatly increase the expense of audits for them. Draft legislation being considered by the Senate Banking Committee includes a similar provision as the House bill. Under the compromise amendment to the House bill, “the board has full discretion to write any sort of rule on inspection that it wants, and everyone covered by the inspection rule still has to register,” said Mat Young, director of congressional and political affairs at the American Institute of Certified Public Accountants. “But if they write the rule such that certain auditors of broker-dealers are not covered by the inspection rule, those non-covered auditors of broker-dealers would no longer have to register either,” he said. That would result in more conformity between registration and full regulation of auditors by the PCAOB, Mr. Young said. “We want to synchronize registration and inspection,” he said. “There isn’t a lot of utility in registering if you don’t do anything with that information.” The House Rules Committee is to meet this afternoon to decide which amendments will be voted on when the full House takes up the sweeping financial-reform legislation. The House is likely to consider the Wall Street reform bill this afternoon. A vote on the landmark legislation is expected in the next few days.

Latest News

Younger Americans are changing the dynamics of IRAs
Younger Americans are changing the dynamics of IRAs

Millennials, Gen Zs are not following the preferences of older generations.

How does your schedule stack up against a typical advisor?
How does your schedule stack up against a typical advisor?

Report reveals how advisors in RIAs, broker-dealers split their time.

Global stock selloff continues into a third day
Global stock selloff continues into a third day

Tariffs are the focus as risk aversity intensifies.

Gold sets new record at $3,077 as trade war fears rise
Gold sets new record at $3,077 as trade war fears rise

Havens are in demand as investors weigh likely impact of tariffs.

Why value stocks are beating growth stocks right now
Why value stocks are beating growth stocks right now

Investor concerns have triggered the rotation, although 'the bar is low'.

SPONSORED Retirement plan balances are flourishing. Why are so many advisors missing out on a $3 trillion opportunity?

Participants who receive professional 401(k) advice see higher returns on average, net, than those who don't.

SPONSORED Focus on clients, not compliance – why Gary Corderman found his fit with Farther

This wealth management platform finally delivers on the technology promises other firms couldn't - giving advisors a better way to scale and serve