Trends Emerging from the PCAOB Annual Inspection Report

by | Nov 18, 2019 | PKF Texas - The Entrepreneur's Playbook®, Tax and Accounting Desk

Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m back again with Marty Lindle, one of our audit directors and one of the faces of our PKF Texas broker-dealer team. Marty, welcome back to the playbook.

Marty: Nice to be here.

Jen: So, where we left off last time we spoke was you were going to share some trends that you’re seeing in the broker-dealer space. What do we need to know?

Marty: This is the eighth annual inspection report, so since the first one, you’ve seen a decrease in the number of broker-dealers and even a decreasing number of broker-dealer auditors. I think just the heightened regulatory scrutiny has caused some people to exit the field.

Jen: Interesting.

Marty: It’s also been increasing a lot of costs, because it’s just more work the auditors have to do. In general, the firms that do multiple broker-dealer audits tend to perform better, and the firms that have issuer clients tend to do better. Issuer clients is what you would commonly think of as a public company. So, they’ve been through the inspection process before.

Jen: Perfect. And broker-dealers, as we mentioned with one of Nicole’s pieces, they’re similar but they’re not the same as a public company.

Marty: Yes, broker-dealers are required to be registered with the SEC, but the vast majority of them are really small private entities.

Jen: Well, perfect. Well, I know there’s some in’s and out’s that we definitely need to get into with different things the broker-dealer should be looking for. Can we get you back to talk a little bit about that?

Marty: Sure.

Jen: Perfect. This has been another Thought Leader production brought to you by PKF Texas The Entrepreneur’s Playbook. For more information about broker-dealers, visit Tune in next week for another chapter.

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