Brokerage Audits Flagged for Violations More Than Half the Time

Progress by accounting firms to bolster their checks of brokerage firm financial records has stalled after just two years of improved results.

Ninety percent of the 50 audit firms the Public Company Accounting Oversight Board inspected in 2022 had at least one deficiency in their work vetting broker-dealers. That’s a sharp increase from 78% of dealers flagged for deficiencies in the previous two years, according to the board’s annual report on broker-dealer audits released Thursday.

Inspectors found fault with 58% of the audits that firms completed, up from 49% in 2021. Auditors who provided examinations for broker-dealers saw their ...