Customer Protection Regulation - Comment Letter - AICPA - February 11, 2013

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Timeline, Enhanced Customer Protections, CFTC
Proposal Date Comment Deadline Final Rule Approved Effective Date
November 14, 2012 February 15, 2012 October 30, 2013 January 13, 2014

Enhancing Protections Afforded Customers and Customer Funds Held by FCMs and DCOs
February 11, 2013

In the comment letter, the American Institute of Certified Public Accountants (AICPA) highlights its concerns with three aspects of the proposed rule:

  • "First, we believe the Commission’s proposed amendment to §1.16(b)(1) to require the public accountant of FCMs to be registered with and have undergone an examination by the Public Company Accounting Oversight Board (PCAOB) is, in some cases, fundamentally unfair and should not be required."
  • "Second, the Commission is proposing to amend §1.16(b)(1) to require any deficiencies noted during a PCAOB examination to be remediated to the satisfaction of the PCAOB within three years. We are concerned with this aspect of the proposal for several reasons. It is unclear what is meant by [deficiencies are to be] “remediated to the satisfaction of the PCAOB” or how the registered FCM would be able to determine that its auditor had complied with such a requirement. Also, if a firm fails to remediate any deficiency on any of its PCAOB inspected audits (regardless of whether it was an audit of an FCM) to the PCAOB’s satisfaction, that firm would be forced to resign from the audits of its FCM clients."
  • "Third, the Commission is proposing to require a public accountant to state in the audit opinion 'whether the audit was conducted in accordance with U.S. GAAS after full consideration of the auditing standards adopted by the PCAOB'...We recommend that, in its final rule, the Commission clarify its expectations about which auditing standards framework would be required. Specifically, we recommend requiring the application of U.S. GAAS to audits of non-issuer FCMs and the application of PCAOB audit standards to audits of FCMs subject to a permanent PCAOB inspection program."

Note: several auditing/advisory firms such as PricewaterhouseCoopers, KPMG, Deloitte&Touche, and Ernst&Young expressed similar concerns in comment letters.

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