The Public Company Accounting Oversight Board (PCAOB) has published a new staff document titled “Broker-Dealer Audit Focus: Review Engagements Regarding Exemption Reports”.

The publication is part of the PCAOB’s mandate to oversee firms auditing broker-dealers that are registered with the US Securities and Exchange Commission (SEC).

The publication is the latest addition to a series that aims to provide practical information to auditors of broker-dealers.

It includes reminders based on Attestation Standard No. 2, perspectives on frequent audit deficiencies, and examples of effective practices that have been observed by PCAOB staff.

PCAOB staff have noted ongoing issues with the review procedures mandated by Attestation Standard No. 2, which sets out the requirements for auditors reviewing statements made by broker-dealers in exemption reports as per SEC rules.

The Broker-Dealer Audit Focus series seeks to address these issues by reiterating relevant standards, rules, and guidance, and by offering reminders and best practice suggestions tailored for auditors of broker-dealers.

The oversight of auditors of broker-dealers is an aspect of the PCAOB’s responsibilities, which include registration, inspection, standard-setting, and disciplinary actions. Broker-dealers are required to file annual reports with the SEC, which must include financial statements and audit reports prepared by PCAOB-registered accounting firms.

Additionally, broker-dealers must submit compliance or exemption reports, along with examination or review reports from the same firms that prepare their audit reports.

These reports must be conducted in compliance with PCAOB standards.

The PCAOB, with SEC approval, also has the authority to determine the scope and frequency of inspections of broker-dealers, potentially differentiating among various categories and considering exemptions for certain categories of auditors.