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PCAOB Registration of Auditors of Privately-Held Broker-Dealers: Is a ?Legislative Fix? Really Needed?

By Michael MacPhail, Esq.

           A tiny and largely unregulated accounting firm issued opinions stating that  the financial statements of broker-dealer Bernard Madoff Investment Securities were accurate, thereby providing ?cover? for the world?s largest Ponzi scheme.  In the aftermath of the Madoff scandal, Congress has focused its attention on the regulation of accounting firms that perform audits of broker-dealers.    When Congress enacted the Sarbanes-Oxley Act in 2002, it included a requirement that ?registered? broker-dealers, i.e., all FINRA member firms, annually file with the Commission a balance sheet and income statement certified by a registered public accounting firm.[1]   In response to securities industry pressure, the SEC issued orders waiving this requirement on an annual basis, using the excuse that Congress had not imposed a deadline for its implementation...continue to full post

Full post as published by NASD, SEC and Regulatory Defense Blog on February 05, 2009 (boomark / email).