Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I am back once again with Marty Lindle, one of our audit directors and one of the faces of PKF Texas’ Broker-Dealer team. Marty, welcome back to the Playbook.
Marty: It’s nice to be here.
Jen: So, we’ve talked a little bit about what’s in the eighth annual report. Now, is there anything new coming up on the horizon that’s not in there already?
Marty: Well, the SEC and Congress still haven’t issued the final rules for an inspection program, so we’re still in the interim program.
Marty: I think there is just some confusion about how to scope it; you know, there’s some thought to exempt all the smaller broker-dealers, but that’s where they found the greatest deficiency rate so that doesn’t make a lot of sense.
Marty: They also don’t want to exclude the next Madoff. So, they want to be sure that they do catch them in the inspection program.
Jen: Are there other things that they also will potentially touch on in, say, the ninth annual report?
Marty: You can never tell with the PCAOB. I mean, they sometimes change their focus, but they usually are going to be focused on things, like the review process and monitoring and revenue. There is a bill in Congress to maybe exempt broker-dealers, smaller broker-dealers from the PCAOB auditing standards and go back to the AICPA standards, but that kind of seems to have stalled out and, quite frankly, it appears that the AICPA’s moving closer to the PCAOB and their auditing standards, so you might not find much difference.
Jen: Interesting. Now is there any kind of time frame where we expect them to come back with this information and solidify everything?
Marty: With the Congress Act, that could take years and, quite frankly, no one really knows. I mean, they’ve been talking about issuing final rules for the program for years now.
Jen: So, it’s pretty much an “act as if” then?
Marty: Yes. Now, FINRA has proposed and it looks like they’re going to happen to allow an additional thirty days to file your audit. Currently broker-dealers are required to file their audits within sixty days, which is a tight time frame for a lot of smaller non-public companies.
Jen: So, Marty, for our viewers who might not know what the acronym FINRA is, what is FINRA?
Marty: Well, it’s the body that regulates broker-dealers other than the SEC. So, it stands for the Financial Industry Regulatory Authority.
Jen: Great. Well, we will you back to talk some more broker-dealer topics in the future. Sound good?
Marty: Sounds good to me.
Jen: All right. For more information about broker-dealers, visit www.PKFTexas.com. This has been another Thought Leader production brought to you by PKF Texas Entrepreneurs Playbook. Tune in next week for another chapter.