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PCAOB Regulation of Broker-Dealer Auditors: Is a ?Legislative Fix? Really Needed?

By Michael MacPhail, Esq.

     In the aftermath of the Bernard Madoff Ponzi scheme, regulators and investors are focusing on   the need to regulate auditors of broker-dealers.  A tiny accounting firm certified the accuracy of the financial statements of Madoff?s broker-dealer, which was an integral part of the fraud and is now in receivership.  Contrary to the intent of Congress, the SEC took action ensuring that the majority of brokerage firm auditors were not subject to Public Company Accounting Oversight Board (PCAOB) oversight.      When the Sarbanes-Oxley Act was enacted in 2002, it included a mandate that registered broker-dealers, i.e., all FINRA member brokerage firms, must file with the SEC financial statements certified by a PCAOB-registered public accounting firm...continue to full post

Full post as published by NASD, SEC and Regulatory Defense Blog on February 06, 2009 (boomark / email).