WASHINGTON (AP) — A watchdog agency for the accounting industry says it's found numerous flaws in how some firms audited brokerages.
The five-month inspection by the Public Company Accounting Oversight Board covered a sample of 23 audits of brokerages done by 10 accounting firms. The inspection found deficiencies in all 23 audits, the board said in a report Monday. It was the board's first such inspection.
The auditing firms' lapses included a failure to adequately verify how much financial cushion the brokerages held against potential losses and the accuracy of revenue figures the brokerages provided.
The report didn't name the auditing firms or the brokerages whose audits were reviewed.
The board said its inspection results show that some auditors weren't properly acting as a check on the brokerages.