The Continuing Evolution of Auditor Reporting in the Broker-Dealer Industry: Issues and Opportunities

Abstract

Over the past decade, there have been significant changes to the regulatory environment for broker-dealer (BD) audits, as it shifted from private to public oversight. These changes unfolded in stages, from required PCAOB registration, to interim inspections under long-standing AICPA auditing and attestation standards, to proposal and finalization of new SEC and PCAOB standards, and finally to inspections under PCAOB auditing/attestation standards. This paper summarizes these events and their implications for both the auditing profession and BD audit quality, highlighting progress made, continuing issues, and research opportunities.