Document ID: SEC-2010-1502-0001
Agency: sec
Document Type: Rule
Title: Commission Guidance Regarding Auditing, Attestation, and Related Professional Practice Standards Related to Brokersand Dealers
Posted Date: 2010-10-01T04:00Z

[Federal Register: October 1, 2010 (Volume 75, Number 190)]
[Rules and Regulations]               
[Page 60616-60617]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01oc10-9]                         

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 241

[Release No. 34-62991]

 
Commission Guidance Regarding Auditing, Attestation, and Related 
Professional Practice Standards Related To Brokers and Dealers

AGENCY: Securities and Exchange Commission.

ACTION: Interpretation.

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SUMMARY: The Securities and Exchange Commission is publishing 
interpretive guidance to clarify the application of certain Commission 
rules, regulations, releases, and staff bulletins in light of the 
authority granted to the Public Company Accounting Oversight Board in 
the Dodd-Frank Wall Street Reform and Consumer Protection Act to 
establish auditing, attestation, and related professional practice 
standards governing the preparation and issuance of audit reports to be 
included in broker and dealer filings with the Commission.

DATES: Effective Date: October 1, 2010.

FOR FURTHER INFORMATION CONTACT: Questions should be referred to 
Rebekah Goshorn (Attorney), Division of Trading and Markets, at (202) 
551-5777, or to John Offenbacher (Senior Associate Chief Accountant) or 
Jeffrey Cohan (Senior Special Counsel), Office of the Chief Accountant, 
at (202) 551-5300, Securities and Exchange Commission, 100 F Street 
NE., Washington, DC 20549-7561.

SUPPLEMENTARY INFORMATION: Section 982 of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act \1\ (``Dodd-Frank Act'') amended the 
Sarbanes-Oxley Act of 2002 \2\ (the ``Sarbanes-Oxley Act'') to 
authorize the Public Company Accounting Oversight Board (``PCAOB''), 
among other things, to establish, subject to approval by the

[[Page 60617]]

Commission, auditing and related attestation, quality control, ethics, 
and independence standards to be used by registered public accounting 
firms with respect to the preparation and issuance of audit reports to 
be included in broker and dealer filings with the Commission pursuant 
to Rule 17a-5 \3\ under the Exchange Act of 1934 \4\ (``Exchange 
Act''). The amendments directly impact certain Commission rules, 
regulations, releases, and staff bulletins related to brokers and 
dealers (collectively referred to in this release as ``Commission rules 
and staff guidance'') and certain provisions in the federal securities 
laws for brokers and dealers, which refer to Generally Accepted 
Auditing Standards (``GAAS'') and to specific standards under GAAS 
(including related professional practice standards).\5\ There may be 
confusion on the part of brokers, dealers, auditors, and investors with 
regard to the professional standards auditors should follow for reports 
filed and furnished by brokers and dealers pursuant to the federal 
securities laws and the rules of the Commission.
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    \1\ Dodd-Frank Wall Street Reform and Consumer Protection Act, 
Public Law 111-203, 124 Stat. 1376 (2010).
    \2\ 17 U.S.C. 7202 et seq.
    \3\ 17 CFR 240.17a-5.
    \4\ 15 U.S.C. 78a et seq.
    \5\ Many parts of Commission rules and staff guidance related to 
obligations of brokers and dealers refer to GAAS and contain 
requirements for audits to be conducted in accordance with GAAS. 
Rule 17a-5(g)(1) under the Exchange Act, for example, states that 
the audit of the report required by Rule 17a-5(d) ``* * * shall be 
made in accordance with generally accepted auditing standards * * 
*'' (See 17 CFR 240.17a-5) Rule 17a-12 under the Exchange Act 
requires that the audit of certain over-the-counter derivative 
dealers ``* * * shall be made in accordance with U.S. Generally 
Accepted Auditing Standards * * *'' (17 CFR 240.17a-12).
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    The Commission is considering a rulemaking project to update the 
audit and related attestation requirements under the federal securities 
laws for brokers and dealers, particularly in light of the Dodd-Frank 
Act. In addition, the PCAOB has not yet revised its rules, which 
currently refer only to issuers, to require registered public 
accounting firms to comply with PCAOB standards for audits of non-
issuer brokers and dealers.\6\
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    \6\ See PCAOB Rule 3100. See also, e.g., PCAOB Rules 3200T, 
3300T, 3400T, and 3500T.
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    As a result, the Commission is providing transitional guidance with 
respect to its existing rules regarding non-issuer brokers and dealers. 
Specifically, references in Commission rules and staff guidance and in 
the federal securities laws to GAAS or to specific standards under 
GAAS, as they relate to non-issuer brokers or dealers, should continue 
to be understood to mean auditing standards generally accepted in the 
United States of America,\7\ plus any applicable rules of the 
Commission. The Commission intends, however, to revisit this 
interpretation in connection with its rulemaking project referenced 
above.
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    \7\ Audit and attestation standards established by the AICPA.
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 List of Subjects in 17 CFR Part 241

    Brokers, Reporting and recordkeeping reports, Securities.

Amendments to the Code of Federal Regulations

0
For the reasons set forth above, the Commission is amending title 17, 
chapter II of the Code of Federal Regulations as set forth below:

PART 241--INTERPRETATIVE RELEASES RELATING TO THE SECURITIES 
EXCHANGE ACT OF 1934 AND GENERAL RULES AND REGULATIONS THEREUNDER

0
Part 241 is amended by adding Release No. 34-62991 to the list of 
interpretive releases as follows:

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                Subject                    Release No.               Date               Fed. Reg. vol. and page
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                                                  * * * * * * *
Commission Guidance Regarding Auditing,        34-62991  September 24, 2010.........  75 FR [INSERT FR PAGE
 Attestation, and Related Professional                                                 NUMBER]
 Practice Standards Related to Brokers
 and Dealers.
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    By the Commission.
    Dated: September 24, 2010.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-24657 Filed 9-30-10; 8:45 am]
BILLING CODE 8010-01-P