Conducting broker dealer audits is not just a strategy to protect investors. It also is a requirement mandated by the Securities and Exchange Commission (SEC). The SEC requires companies to find a broker dealer audit service to bolster the protections granted by other types of government laws and regulations. Companies that qualify to provide broker dealer audit services must register with the Public Company Accounting Oversight Board (PCAOB).
At Ernst Wintter & Associates (EWA), our company is registered with the PCAOB to provide broker dealer audit services. Our team of highly-rated Certified Public Accountants (CPA) provides customized broker dealer audit services to meet the needs of our clients, as well as help them navigate through the complex process of providing the utmost protection for investors. Our broker dealer audit services ensure your investors receive protection in an efficient and cost-effective manner.
Top 4 Reasons Why Broker Dealer Audits Help Investors
The results of a broker dealer audit can reveal one or more issues that put investors at risk of losing money. Although broker dealer audit services can reveal many inaccuracies and inconsistencies that hurt investors, you have four primary reasons to hire a company to conduct broker dealer audits.
Audit Revenue Sources
The last thing an investor wants to hear is that a broker dealer cooked the books by listing revenue sources that do not exist. A comprehensive broker dealer audit verifies each source of revenue, as well as ensures the amount of money generated from each revenue source is accurate. One of the most common ways for broker dealers to conceal the identities of revenue sources concerns attributing revenue to ghost and/or shell companies.
Audit Account Payables
Not only does a broker dealer audit confirm revenue sources, but it also reveals the accuracy of account payables. Unethical broker dealers conceal accounts payable to enhance an income statement. What appears to be a financially healthy operation for investors to sink money into turns out to be a company swimming in red ink because of a high value for accounts payable that the company has hidden from investors.
Evaluate the Accuracy of Financial Statement Disclosures
Like every type of business, broker dealers must submit accurate financial statement disclosures for investors to review. An inaccurate financial disclosure statement might attract investors that otherwise would have passed on investing money in a broker dealer. One of the most common strategies to dress up a financial statement disclosure is to depreciate assets at a rate that is much faster than what is allowed by following Generally Accepted Accounting Principles (GAAP).
Ensure Procedures Comply with Regulations
The SEC has established a long list of regulations to ensure broker dealers protect investors from fraud and other types of unethical behavior. Our broker dealer audit services go well beyond crunching revenue and expense numbers. We also ensure every procedure established by a broker dealer complies with SEC regulations. Our team of CPAs conducts regular audits to ensure broker dealers keep up with the rapidly changing regulatory landscape at both the state and federal levels.
EWA Broker Dealer Audits Protect Investors
EWA audits examine whether a broker dealer follows the rules and regulations established by the SEC and PCAOB. Our goal is not to review individual employee action, but to investigate the entire company to determine whether there are inaccuracies and inconsistencies. Our broker dealer audit services act as a confirmation process to ensure regulatory compliance.