Guidance Released on Registration of Auditors of Nonpublic Broker-Dealers


The PCAOB and SEC issued guidance on the registration of auditors of nonpublic broker-dealers. Until recently, auditors of nonpublic broker-dealers were not required to register with the PCAOB as a result of a series of SEC exemptions dating back to 2003. The latest SEC order, issued in December 2006, extended the exemption to cover financial statements for fiscal years ending before Jan. 1, 2009. That exemption expired Dec. 31, triggering a requirement that financial statements of nonpublic broker-dealers for fiscal years ending after Dec. 31, 2008, must be audited by an accounting firm that is registered with the PCAOB.

Auditors of nonpublic broker-dealers must be registered with the PCAOB as of the date of the auditor’s report. The SEC is urging auditors to begin the registration process with the PCAOB as soon as possible.

The new PCAOB and SEC guidance, available at tinyurl.com/ac77ox and tinyurl.com/cknhcu, respectively, addresses the registration process, including timing and fees; the extent to which applications are public and the process for seeking confidentiality; obligations associated with being registered, including periodic reporting and annual fees; and the applicable auditor reporting and independence requirements.

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