Resources/ Updates


PCAOB Brief Results ~ 2016 Inspections of Auditors of BDs

The Public Company Accounting Oversight Board (PCAOB) published a staff inspection brief that previews the results of its 2016 inspections of the auditors of broker-dealers to help auditors as they plan and perform future audits. The 2016 inspections were conducted under the interim inspection program.

Expect the full details in the upcoming “Annual Report on the Interim Inspection Program Related to the Audits of Brokers and Dealers, ” to be issued in August 2017.

PCAOB’s Observations:

  • Impaired auditor independence:
    • auditors were involved in the preparation of the financial statements or accounting records of their audit clients
    • Deficiencies in financial statement audit areas similar to previous inspection cycles, including:
      • revenue recognition, financial statement presentation and disclosures, and the assessment of risks of material misstatement due to fraud.
      • Insufficient assessments of relationships/ transactions with related parties.

In 2016, PCAOB inspectors also observed deficiencies in:

  • Audit procedures on the supporting schedules to financial statements
  • Audit procedures for the attestation engagements:
    • examinations of compliance reports
    • reviews of exemption reports
    • engagement quality reviews.

About the Data

“PCAOB staff inspected 75 firms in 2016 covering 115 audit and attestation engagements. The selected audit and attestation engagements were for fiscal years that ended during the period from June 30, 2015, through June 30, 2016.”

The PCAOB inspects firms that perform audits of SEC registered broker-dealers to “assess the firm’s audit and attestation engagements for compliance with professional standards, rules of the SEC and the PCAOB, and the Sarbanes-Oxley Act of 2002.”

Related Documents

PCAOB Releases Results of 2016 Inspections of Auditors of BDa ~ June 28, 2017

PCAOB Topic PAGE: Info for Auditors of Broker-Dealers

PCAOB Staff Inspection Brief – June 2017

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