Expert Panel - Stockbrokerage and Investment Banking 

    About the Expert Panel
    The Stockbrokerage and Investment Banking Expert Panel serves the needs of AICPA members on financial and business reporting and audit and attest matters. The expert panel protects the public interest by bringing together knowledgeable parties in the stockbrokerage and investment banking industry to deliberate and come to agreement on key stockbrokerage and investment banking issues.
    Industry News and Resources

    On June 26, 2014, the PCAOB released staff guidance for auditors of SEC-Registered Brokers and Dealer. Visit for more information.

    The Center for Audit Quality (CAQ) and the American Institute of CPAs (AICPA) have jointly issued a Member Alert outlining regulatory changes that are applicable to audits and attestation engagements of Brokers and Dealers (BDs) and Futures Commission Merchants (FCMs), including those entities that are dual-registered.

    The Alert is intended to highlight for audit firms certain auditing considerations in response to regulatory changes set forth by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), as well as related guidance and standards issued by the Public Company Accounting Oversight Board (PCAOB).


    The PCAOB announced the dates for 2014 forums on auditing smaller broker-dealers. To learn more about these forums, view dates and locations, and register, click here.

    The SEC's recent presentation to the PCAOB Forum on Auditing Smaller Broker-Dealers is available here. Additionally, the PCAOB added to its website the text of remarks Board Member Jeanette M. Franzel at the same forum.

    In July 2013, the SEC issued two final rules that affect broker-dealers registered with the SEC and their auditors. One rule adopts amendments that would increase protections for investors whose cash and securities are held by broker-dealers registered with the SEC. This amendment to SEC Rule 17a-5 require, in part, that the audits of broker-dealers' financial statements and supplemental information, as well as the auditor's examination of the compliance report or the auditor's review of the examination report, be conducted in accordance with PCAOB standards for fiscal years ending on or after June 1, 2014.


    The second rule adopts amendments to the net capital, consumer protection, books and records, and for broker-dealers.

    The staff for the SEC Division of Trading and Markets recently issued staff guidance (in the form of FAQs) in connection with these rules. To read FAQs about the amendments to Rule 17a-5 and Form Custody, click here. For FAQs concerning certain broker-dealer financial responsibility rules, click here. Other FAQs published by the staff of SEC Division of Trading and Markets are available here.

    In October 2013, the PCAOB adopted two attestation standards pertaining to audits of brokers and dealers and an auditing standard, which is applicable when auditors are engaged to perform audit procedures and report on supplemental information that broker-dealers and others file with the SEC. These standards are effective for fiscal years ending on or after June 1, 2014.

    In August 2011, the SEC approved a rule, adopting an interim inspection program related to audits of broker-dealers. Under the interim inspection program, the PCAOB inspects audit engagements of all types of broker-dealers. The “Third Report on the Progress of the Interim Inspection Program Related to Audits of Brokers and Dealers,” was released on August 18, 2014, and states that the PCAOB staff is currently working on a rule proposal for the Board to issue during 2016 to establish a permanent inspection program and its scope.

    Audits of BDs are currently included in an interim inspection program by the PCAOB. Until such time that the PCAOB announces the scope of their permanent inspection program, audits of BDs will be subject to both PCAOB inspection and peer review. Peer reviewers are regularly identifying audits where the firm failed to comply with SEC independence rules by preparing the firm’s financial statements, which is consistent with the PCAOB interim inspection program findings. Read more on this topic and other peer review implications for broker dealer engagements.

    The SEC Office of Compliance Inspections and Examinations announced its 2014 examination priorities for investment advisers and investment companies, broker-dealers, clearing agencies, exchanges and other self-regulatory organizations, hedge funds, private equity funds, and transfer agents.

    Audits of Futures Commission Merchants (FCMs)

    In November 2013, the CFTC approved a final rule on enhancing customer protections, which, in part, will require audits of futures commission merchants (FCMs) to be performed in accordance with PCAOB standards by a PCAOB-registered firm that “must have undergone a PCAOB inspection”. Find out more.

    Expert Panel Projects

    Members of the Expert Panel recently presented a live webinar “Broker-Dealer Update”, covering final amendments to SEC Rules 17a-5 and 17a-11 and new PCAOB attestation and auditing supplemental information standards for broker-dealer audits. Presentation slides are available.

    The Panel has developed an example of an illustrative independent accountants' report on applying agreed-upon procedures related to the entity's claim for exclusion from membership in SIPC (Form SIPC-3), which is currently being reviewed by the specified parties. Once all parties have agreed, an illustrative example of such report will be posted here.

    Past Meeting Highlights

    September 3, 2014

    June 4, 2014

    March 5, 2014

    Archived Meeting Highlights

    Members of the Expert Panel

    Paul Lameo, Chair PricewaterhouseCoopers LLP

    Jeffrey Alfano, Oppenheimer & Co

    David Bonnar, Morgan Stanley

    Karen L. Dealey, Jefferies LLC

    Christopher Donovan, Deloitte & Touche LLP

    Michael Fehrman, Deutsche Bank

    Sandra Flaviani, Charles Schwab & Co., Inc.

    Craig Goodman, EisnerAmper LLP

    Paul Nockels, McGladrey LLP

    Daniel Palomaki, Citigroup

    Mark Ramler, Grant Thornton LLP

    Michael D. Smith, KPMG LLP

    Stephen A. Zammitti, Ernst & Young LLP

    Learn more about the expert panel members by reading their biographies.

    Staff Contacts

    Irina Portnoy, Senior Technical Manager

    Expert Panel Recommended Guidance


    CPE and Conferences


    NewsTraining & Development

    A A A

    Copyright © 2006-2014 American Institute of CPAs.