Audit Team Ready for Financial Reform Bill

July 23, 2010

On Wednesday, President Barack Obama approved a major financial regulatory reform package. Among other provisions, one element of the Dodd-Frank Act directly affects auditors of broker-dealers. The Dodd-Frank Act expands the Public Accounting Oversight Board (PCAOB)’s authority to oversee these audit firms.

Under the Sarbanes-Oxley Act, auditors of brokers and dealers were required to register with the Board. The new Act provides the PCAOB with additional standard-setting, inspection, and disciplinary authority regarding broker-dealer audits. However, the Act also allows the PCAOB to differentiate among broker-dealer classes and exempt certain brokers such as those who do not engage in clearing, carrying or custody of client assets. The act reconciles registration with inspection so that any auditors not covered by the inspection rule would also no longer be required to register with the PCAOB.

The PCAOB issued a statement Wednesday (click here) indicating that further guidance will be forthcoming.

Scott B. Price and Company is currently registered with the PCAOB and is prepared to continue our ongoing compliance with PCAOB requirements for auditors of broker-dealers, as well as meet the additional inspection provisions should they apply. Please check back here for updates as the PCAOB continues to release information about auditor requirements and do not hesitate to contact Erin Hastings (erin@sbpcpa.net) should you have any questions with regards to the new legislation.