Congress introduces bill to close auditing loophole
Bill aims to increase scrutiny on small auditors in wake of alleged Madoff fraud
Bill aims to increase scrutiny on small auditors in wake of alleged Madoff fraud
A US Congressman has introduced a bill to close a legal loophole that allowed
the tiny auditing firm of alleged fraudster Bernard Madoff to avoid scrutiny,
WebCPA reported.
Paul Kanjorski, a Republican who is chairman of the House Financial Services
Subcommittee on Capital Markets, Insurance, and Government-Sponsored
Enterprises, introduced the bill, which gives the Public Company Accounting
Oversight Board the full authority to inspect, examine and discipline auditors
of all broker-dealers, not just public broker-dealers, WebCPA said.
Under current law, the PCAOB is unable to inspect and examine the work of the
auditors of most broker-dealers, according to WebCPA. However, as a result of a
Securities and Exchange Commission decision late last year, the auditors of all
broker-dealers must now register with the PCAOB.
The PCAOB recently published guidance on registering auditors of
broker-dealers with the board, and the new requirements for broker-dealer
financial statements being audited by PCAOB-registered firms.
The bill introduced by Kanjorski allows auditors of broker-dealers, such as
Madoff’s three-person auditing firm, Friehling & Horowitz, to also be
subject to disciplinary action by the PCAOB.
Read the full article:
Bill
Would Beef up Broker-Dealer Auditor Oversight
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