Tuesday, November 24, 2009

VSCPA Requests Amendment to Bill on Auditors of Broker-Dealers

On November 19, 2009, the VSCPA sent a letter to Sen. Mark R. Warner urging him to offer an amendment to modify the problematic Section 982 of Chairman Chris Dodd’s financial regulatory reform package.

Section 982 would extend the registration and inspection by the Public Company Accounting Oversight Board (PCAOB) to the auditors of all non-public broker-dealers. The VSCPA believes an expansion of PCAOB authority to register and inspect auditors is absolutely appropriate and necessary to build public confidence and avoid further investor scams, such as the Ponzi scheme notoriously committed by Bernard Madoff.

To achieve this balance, it is important to distinguish between broker-dealers who actually control client funds (clearing and custodial broker-dealers) versus those broker-dealers who never touch investors’ monies (introducing broker-dealers). The VSCPA does not support the language as written. However, if it is modified to expand PCAOB registration and inspection to auditors of clearing and custodial broker-dealers, but not introducing broker-dealers, the VSCPA would endorse its passage.

Read the VSCPA’s full comments for more information.

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