Proposed Regulatory Compliance for Brokers, Dealers Open to Public Comment

Jack Humphrey, Regulatory journalist
December 14, 2010 /

Public Company Accounting Oversight Board (PCAOB) has released its proposed interim inspection program, a regulatory compliance that oversees audits of brokers and dealers, immediately following its meeting on December 14, 2010.

PCAOB’s meeting, which also tackled portion of the support fee to fund the board’s extended broker-dealer oversight responsibility, is the first step towards ensuring that audit securities of brokers and dealers are regulated, said Daniel Goelzer, acting chairman of PCAOB.

The implementation of the regulatory compliance would serve temporarily to put up an inspection program for broker-dealer audits while a permanent set of rules is currently under consideration by the board, expected to be finished two years from now.

PCAOB emphasized that there are no changes with how audits of brokers and dealers are regulated since the proposed regulatory compliance is still under the generally accepted auditing standards (GAAS).

The regulatory compliance actually gives idea to PCAOB “how to maximize the benefits of broker-dealer inspections,” helping the public maximize investments effectively and efficiently, Goelzer said. It also outlines ways of allocating the Accounting Support Fee for the regulation of brokers and dealers, subject to SEC approval but expected by PCAOB to take effect by 2012.

PCAOB said the proposed rules would also increase market capitalization threshold for equity. Instead of including only the common stock of issuers in coming up with the numbers from market calculation, their voting and non-voting common equity takes spot in the inspection program.

PCAOB gives the public until February 15, 2011 to give comments on the proposed regulatory compliance.


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