• Register
Return to: Home > News > Standards > PCAOB adopts standards for brokers’ audits

PCAOB adopts standards for brokers’ audits

The Public Company Accounting Oversight Board (PCAOB) has issued standards for auditors of brokers and dealers and an auditing standard for supplemental information, pending the Securities and Exchange Commission's (SEC) approval.

At an open board meeting today, PCAOB considered two attestation standards related to the auditor's examination of compliance reports and the review of exemption reports of broker-dealers.

The PCAOB has the power to oversee the audits of broker-dealers registered with the SEC, after the Dodd-Frank Act amended the Sarbanes-Oxley Act in 2010.

Last July, SEC amended Rule 17a-5 of the Securities Exchange Act 1934 to require that only PCAOB-registered firms, following PCAOB standards, can conduct:

  • audits of broker-dealers' financial statements and supplemental information,
  • examinations of broker-dealers' compliance reports,
  • reviews of broker-dealers' exemption reports

PCAOB chairman James Doty said he was pleased to support the adoption of the two standards at today's board meeting and said:

"These standards are designed to address the SEC's requirements that brokers and dealers file with the SEC annual financial reports, including supporting schedules, that are audited in accordance with PCAOB standards, as well as file one of two new reports -- either a compliance report or an exemption report -- and the related auditor's report".

PCAOB chief auditor and director of professional standards Martin Baumann said both standards put emphasis on the coordination between the review engagement, the audit of the broker-dealer's financial statements and audit procedures performed on the supplemental information.

PCAOB said both standards, Examination Engagements Regarding Compliance Reports of Brokers and Dealers and Review Engagements Regarding Exemption Reports of Brokers and Dealers, will be effective for examination engagements and review engagements of fiscal years ending on or after 1June 2014.

Regarding Auditing Standard No. 17 Auditing Supplemental Information Accompanying Audited Financial Statements, PCAOB said it supersedes the interim auditing standard AU sec. 551 Reporting on Information Accompanying the Basic Financial Statements in Auditor-Submitted Document.


Related article

SEC hardens broker-dealer audit requirements

Top Content

    2018 Digital Accountancy forum and awards: Digital transformation

    The Accountant presents highlights from The Digital Accountancy Forum & Awards 2018 panel discussions

    read more

    2018 Digital Accountancy Forum and Awards: Tech deep dive

    The second panel session of the day saw experts discuss how new technologies should not just be seen as a threat, and could be used to improve accounting.

    read more

    Digital Accountancy Forum and Awards: The power of data

    The third panel discussion of the day saw panellists discuss some of the worries their clients have had, how to overcome them, and how data and technology are providing real business opportunities.

    read more

    Digital Accountancy Forum and Awards: The next generation

    With young people more mobile, and technology changing the industry rapidly, the final panel session of the Digital Accountancy Forum looked at how firms would need to adapt to the new reality

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.