Think things are better now? Think again, kids. Audits of broker-dealers have "disturbing" deficiencies, including two instances where the firms that conducted the audits didn't adhere to rules requiring independence among auditors, a new report found, according to the WSJ.
The report, by the Public Company Accounting Oversight Board, set up by Congress to oversee the audits of public companies, reviewed portions of 23 audits of broker-dealers by 10 audit firms.
The board found independence problems in two cases where the auditors prepared, or assisted in preparing, financial statements they were auditing, something allowed under rules by the American Institute of Certified Public Accountants but not under the stricter rules for broker-dealer auditors under the Securities and Exchange Commission.
The board said it wouldn't identify the names of the auditing firms or the broker dealers. Calling the results "disappointing" and "disturbing"….