For two years, the Public Company Accounting Oversight Board (PCAOB) has been reviewing the work of auditors of broker-dealers, with a view to assessing their work and enabling the PCAOB to develop a permanent program for inspection of broker-dealer audits. Last week, the PCAOB issued its second progress report on this interim inspection program. For broker-dealers, PCAOB’s report provides a useful preview of the issues on which their auditors will be increasing their focus in future audits; PCAOB’s criticisms of the auditors that it regulates will most likely cause the auditors to beef up their audits in the areas criticized, and broker-dealers are bound to feel the effects in future audits. Broker-dealers should review the second report, the most significant findings of which are summarized in our client alert.
