BD Audits | PCAOB member

PCAOB finds recurring problems with BD Audits

Almost nine in ten audits of broker-dealers examined in 2014 had deficiencies, according to the recent Public Company Accounting Oversight Board report, and almost a quarter had independence issues. With this in mind, the board plans to increase the number of firms inspected by 14 percent in 2015, and is working toward establishing a permanent inspection program.

Robert Maday, PCAOB program leader for Broker-Dealer Audit Firm Inspections urges broker dealer audit firms to re-examine their audit approaches due to ongoing issues identified during inspections.

Annual report results at December 2014 show that of 106 audits, 26 had independence findings; and there were audit deficiencies in all of the 66 firms inspected.

What are the key areas of concern?

Financial Statement Deficiencies: A deficiency, as defined by the PCAOB, means the audit firm hadn’t obtained enough evidence to support its approvals of a company’s financial statements and internal controls. Among types of deficiencies in statements related to controls are; a deficiency in design, a deficiency in operation, a significant deficiency, a material weakness leading to a reasonable possibility that a material misstatement is not detected.  


Auditor independence:  PCAOB Rule 3520 –

 A registered public accounting firm and its associated persons must be independent of the firm’s audit client throughout the audit and professional engagement period. The rule safeguards auditors independence, objectivity and professional skepticism through mandatory rotation of audits. Additionally, the rule helps limit pressure on auditor’s to develop and protect long-term client relationships to the detriment of investors and capital markets.

Important Considerations

Audit rules and the SEC exchange act rule 17a-5: Audit and attestation engagements of brokers and dealers are now required to be conducted in accordance with PCAOB standards relevant to Exchange Act Rule 17a-5 (“Rule 17a-5”) that became effective for broker and dealer annual reports with fiscal years ended on or after June 1, 2014. What does this mean?  The SEC now requires broker-dealer audits be conducted in accordance with PCAOB standards, which require the auditor be independent of the CPA who prepares the financial statements and cannot be the same auditor who files the SEC audit report.


Looking forward to 2015 here is what we can expect from PCAOB inspections –

In an ongoing effort to identify focus areas for PCAOB inspections, the PCAOB released a staff inspection brief outlining the focus of 2015 PCAOB inspections:

  • The examination of compliance reports and the review of exemption reports under newly applicable PCAOB standards, 
  • Financial statement audit areas that had deficiencies identified in past inspections, including revenue recognition and use of information produced or used by broker-dealers, 
  • Audit procedures on the supplemental schedules to the financial statements, 
  • The engagement quality review, and 
  • Auditor independence.

Need help with your Broker-Dealer Audit?  Reach out to Dave Banerjee, CPA  for certified PCAOB audits. 

RND Resources, Inc. has a suite of services for broker-dealers. Whether you are starting a broker-dealer for the first time or have an existing firm that needs support, we are equipped with expertise.

Integrate business planning, compliance, operations, trading, and registration.

  • Full Service Brokerage Support
  • On-Site Audit Services
  • Expert Regulatory Consulting
  • Customized Compliance Programs

Contact us for details (818) 657-0288 or email.

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BD Audits | PCAOB member

Free Webinar: PCAOB for FINOP

Join us for A free webinar, “PCAOB for FINOP: A Necessary Update for FINOPS” on December, 17th at 12:15pst.


You can expect detailed advice regarding:

1. SEC Filing

2. Auditor Engagement

3. Workpaper Review


Date: Wednesday, 12/17/2014

Time: 12:15 PST


Registration URL:

Webinar ID: 103-613-859


Free Webinar: CPA Audits for FINOPS

Due to popular demand of our June webinar, “FINOPS Guide to PCAOB Audits,” we are revisiting the subject for further elaboration. On Thursday, November 20th, Dave Banerjee, CEO of RND Resources will be presenting a free webinar entitled, “CPA Audit for FINOPS.”

You can expect detailed advice regarding:

1. Summary of changes to the PCAOB Audit of Broker Dealers.
2. Increased audit requirements arising from the above changes and the burden of evidence required.
3. How to extract value for the audit process and keep costs down.

Date: Thursday, 11/20/2014
Time: 12:15 PST

Registration URL:
Webinar ID: 153-584-939

RND Resources at the NSCP Conference

The 2014 NSCP Conference is almost upon us and we are pleased to announce that RND Resources will be speaking and exhibiting.  We invite you to join us at our booth (#8) and chat with our representatives.   We welcome the opportunity to get to know you and better show you how we can solve your compliance & PCAOB challenges.

Our CEO, Dave Banerjee will be speaking in regards to “Due Diligence of Funds, Counterparties and Vendors” on Tuesday, October 21st at 11:15am.  We hope that after attending his session you will come away with a better understanding of due diligence.

Your presence will do us a great honor and we are looking forward to meeting you.