October 30, 2013 Articles

PCAOB and SEC Alter Audit Landscape for Broker-Dealers

The lingering consequences of Sarbanes-Oxley, Dodd-Frank, and the Bernie Madoff scandal continue to reverberate in both the accounting profession and the broker-dealer industry.

By Gabriel A. Mendel, Sarah S. Peters, Gregory S. Amoroso, and Mac Knox

The lingering consequences of Sarbanes-Oxley, Dodd-Frank, and the Bernie Madoff scandal continue to reverberate in both the accounting profession and the broker-dealer industry. The intersection of the two has seen significant recent activity in the form of new rules from the Securities and Exchange Commission (SEC) and new standards and inspection reports from the Public Company Accounting Oversight Board (PCAOB). The evolution of these increasingly specialized standards and practices may pose a significant challenge to auditors of broker-dealers, particularly to the hundreds of smaller accounting firms—already sharply criticized in the PCAOB’s interim inspection reports—that audit just a single broker-dealer client or that do not audit public companies.

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