Choose Professional Auditing with PCAOB Broker Dealer Auditor

Posted by Jack Trent on April 30th, 2019

The PCAOB is a non-profit corporation established by Congress to direct the audits of public companies so as to protect investors and the public interest by advancing informative, precise, and independent audit reports.

While some independent auditors may offer low fees to entice broker-dealer clients for their annual audits, broker-dealers ought to be careful about going with the lowest bidder, as significant extra costs can be brought about if the low-cost auditor is regarded to have performed an inadequate audit. In view of the quality of the audit work performed by the auditor, broker-dealer clients could get stuck with the tab, both monetarily and in time and exertion by broker-dealer staff, for extra audit processes not performed by the low-cost auditor. In the event that if the audit is deemed to be insufficient, the broker-dealer may be needed to repeat and reissue their annual financial audit reports.

Consistently the Public Company Accounting Oversight Board, which is charged with oversight of auditors of public organizations, including every single broker-dealer registered with the SEC, performs sample inspections of broker-dealer audits. The inspection results revealed that numerous broker-dealer audits contained deficiencies. As usual, the Board assessments focused on particular areas of the audits that have been considered to be more risky.

The areas reviewed deeply by the board inspectors included: auditor independence, revenue testing, financial statement preparation and disclosure, assessment and response to material misstatement because of misrepresentation, reasonable value measurements and related party transactions.

In spite of the fact that the individual auditors’ results of the Board’s inspections are not made open, there might be conditions where an audit deficiency found amid an inspection could prompt the broker dealer having to re-issue amended fiscal statements. That is, if the inspected auditor concludes that a required auditing process was overlooked from the audit of the financial statements and that such omission impairs the auditor’s capability to stand by its previously issued audit report on the broker-dealers fiscal statements, the auditor should quickly perform the omitted audit procedure.

If, after the execution of the omitted audit procedure, the auditor finds the previously issued and submitted financial reports were materially misquoted, the auditor may need the broker-dealer to restate and reissue the financial reports once the complete audit procedures are performed. This will result in huge additional fees and costs not initially considered by the broker-dealer in order to correct their financial statements.

To avoid possible restatement and reissuance of yearly financial statements, broker-dealers ought to ensure their independent PCAOB Broker Dealer Auditor has expertise in the complexities of the broker-dealer regulations, and has a history of effective PCAOB inspection reports.

The reason behind audit independence and accounting assistance and advice is to protect both parties involved. The controls set up may appear a binding to firms and their clients, yet like everything with the principles and laws it ultimately creates challenge and development. Growth and challenge always improve the bar for all to accomplish another level of excellence.

So, hire PCAOB Broker Dealer Auditor to experience reliable audit process.

Jack Trent

About the Author

Jack Trent
Joined: April 23rd, 2019
Articles Posted: 11

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