The News: Two Republican and two Democratic senators have introduced a bill to exempt small brokers from having to use a Public Company Accounting Oversight Board (PCAOB)-registered audit firm to do its audit.
Who It Affects: Privately held, non-custody brokers and dealers.
Why It’s Important: Small brokers are being held to the same auditing standard as large publicly held brokers.
Background: The Dodd-Frank Act requires all investment brokers and dealers, irrespective of size, to hire a Public Company Accounting Oversight Board (PCAOB)-registered audit firm to conduct audits using significantly more complex guidelines designed for larger, public companies. This was a reversal of standards set by the Sarbanes-Oxley Act. A version of the bill made it through committee the last two years, but was not passed by Congress before the end of the year.
What’s Next: Committees have to pick up the bill.
Read More:
Cotton Introduces the Small Business Audit Correction Act
It has become apparent that the larger firms have control and influence over the SEC and FINRA – this would help and allow the smaller firms to remain competitive and Agile.