Audit regulators are worried about the number and range of audit problems found so far in their preliminary dive into the work of auditors of brokers and dealers registered with the Securities and Exchange Commission, some of which also audit public company financial statements.
The Public Company Accounting Oversight Board issued a report on its findings to date after looking at only 23 audits across 10 audit firms as part of its interim inspection program to begin regulating auditors of brokers and dealers under the Dodd-Frank Act. Three of the 10 firms are already under the watchful eye of the PCAOB because they audit public company financial statements, although the PCAOB didn’t identify the firms it has inspected so far. Inspectors found problems with every one of the 23 broker-dealer audits they have inspected so far. “While the results of these initial inspections cannot be generalized to all securities broker and dealer audits and represent only a small portion of the inspections planned for the interim program, the nature and extent of the findings are of concern to the Board,” said PCAOB Chairman James Doty in a statement.
