On August 26, the Securities and Exchange Commission published notice in the Federal Register regarding proposed rule changes that the Financial Industry Regulatory Authority (FINRA) had filed with the SEC. The changes would delete the order audit trail system (OATS) rules in the FINRA Rule 7400 Series and FINRA Rule 4554 once FINRA members are

On May 15, the Securities and Exchange Commission adopted amendments to the national market system plan governing the consolidated audit trail (the CAT NMS Plan). The Financial Industry Regulatory Authority (FINRA) and the national securities exchanges that are CAT NMS Plan participants (the Participants) are now required to publish and file with the SEC a

On April 20, the Securities and Exchange Commission issued two orders relating to the implementation of the Consolidated Audit Trail (CAT) to address the impact of COVID-19. In the first order, the SEC allowed broker-dealers to establish a phased CAT reporting timeline, subject to certain conditions. In its second order, the SEC permitted certain introducing brokers to follow the small broker-dealer reporting timeline.
Continue Reading SEC Provides for Phased CAT Broker-Dealer Reporting Timelines

On December 30, 2019, the Securities and Exchange Commission voted to propose amendments (the Proposal) to its auditor independence rules, many of which have not been updated since their initial adoption in 2000 and amendments in 2003.
Continue Reading SEC Announces Proposed Amendments to Modernize Auditor Independence Rules

On October 23, the Securities and Exchange Commission approved new audit reporting standard, AS 3101, proposed by the Public Company Accounting Oversight Board (PCAOB), which requires auditors to provide new information in public company audit reports, with the goal of making such reports more informative for investors and other financial statement users. The adoption of the PCAOB rule represents the first significant change to the auditor’s report in several decades and will fundamentally change the auditors’ report from a writing that consists entirely of boilerplate (in the vast majority of cases at least), into a document that contains disclosure specific to the particular filer, as discussed in more detail below. In a public statement on October 23, SEC Commissioner Kara Stein said she expects the PCAOB rule to result in auditor’s reports that “provide investors with more meaningful information about the audit, including significant estimates and judgments, significant unusual transactions and other areas of risk at a company,” which will “add to the total mix of information available to investors when making voting and capital allocation decisions.”
Continue Reading SEC Approves PCAOB Rule to Require Enhanced Audit Reports

On May 11, the Public Company Accounting Oversight Board (PCAOB) re-proposed its standard for information that auditors are required to provide in their audit opinions. As noted in its press release regarding the re-proposed standard, the PCAOB desires to make auditor’s reports more informative for investors. In 2013, the PCAOB proposed a standard that would require a firm to disclose in its audit reports critical audit matters arising from an audit of an issuer’s financial statements. The PCAOB received extensive comments in response to its original proposal and held a public roundtable to discuss the previously proposed standard and comments received. As a result, the PCAOB has re-proposed the standard with modifications to its original proposal.
Continue Reading PCAOB Re-Proposes Auditor Reporting Standard to Enhance Auditor Reports