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PCAOB amends rules for broker-dealer audit oversight and proposes transparency improvements

  • PCAOB (US Public Company Accounting Oversight Board) (dark gray) Image

05 Dec 2013

During its meeting on Wednesday, the PCAOB approved final guidance on conforming amendments to the Dodd-Frank Act related to broker-dealer audits. The PCAOB also approved the issuance of reproposed amendments designed to improve transparency of auditor reports.

After considering comments on the February 2012 proposal to update its rules to conform them with the Dodd-Frank Act amendments, the PCAOB voted during its meeting Wednesday to amend certain of its rules pertaining to the audits and auditors of brokers and dealers. These amendments consist of conforming amendments that reflect technical modifications to the Board's rules to align them with the provisions enacted in the Dodd-Frank Act. The amendments also "require that registered firms that audit brokers and dealers comply with certain of the Board's professional practice standards, update a number of Board rules and forms in light of administrative experience, and make certain updates to the Board's Ethics Code." If these amendments are approved by the SEC, the "amendments to the PCAOB's rules, SECPS membership requirements, and Ethics Code will take effect on June 1, 2014. The amendments to Forms 1, 1-WD, 3, and 4 will take effect July 1, 2014. The amendments to Form 2 will take effect April 1, 2015".

The PCAOB also approved for release a reproposal aimed at improving the transparency of audit reports. The original release was made in October 2011 and the PCAOB received 43 comment letters on that release. This new proposal incorporates feedback from these commenters, as well as feedback received through meetings of the Investor Advisory Group and the Standing Advisory Group. This new proposal would "require the accounting firm issuing an auditor's report ("auditor") to disclose in the auditor's report (1) the name of the engagement partner on the most recent period's audit and (2) the names, locations, and extent of participation of other public accounting firms that took part in the audit and the locations and extent of participation of other persons (whether an individual or a company) not employed by the auditor who performed procedures on the audit". Comments on this reproposal were originally due on 3 February  2014, but on 31 January 31, the PCAOB extended the comment deadline to 17 March 2014.

For more information, please see the following on the PCAOB's website:

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