Friday, January 9, 2009
We all know that Bernie Madoff's brokerage firm was audited by an obscure 3-person accounting firm that is not registered with the Public Company Accounting Oversight Board. This was permitted because the SEC exempted privately owned brokerage firms from the SOX requirement that firms are audited by registered accountants. Floyd Norris reports, in today's NY Times, that the SEC has now quietly rescinded that exemption. As a result, firms that audit broker-dealers for fiscal years that end December 2008 or later will have to be registered. However, under another SOX provision, PCAOB is allowed to inspect only audits of publicly held companies. NYTimes, Oversight for Auditor of Madoff.