Time Runs Out On PCOB Deadline

Time Runs Out On the Public Company Accounting Oversight
Board Deadline
The Public Company Accounting Oversight Board (“PCAOB”) was established by the Sarbanes-Oxley Act, of 2002 (the “Act”). The purpose of the Act was to oversee the audit of public companies that are subject to the securities laws to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The Act initially prohibited any public accounting firm to prepare, issue or participate in the preparation or issuance of, any audit report with respect to any issuer unless the accounting firm was registered with the PCAOB. Additionally, the Act required non-issuer, non-public, broker-dealer (“Broker-Dealer(s)”) financial statements to be certified by a PCAOB registered firm.

On December 12, 2006, the SEC extended the deadline by which Broker-Dealers must file financial statements that have been certified by a PCAOB registered public accounting firm to December 31, 2008. As a result, Broker-Dealers filed annual audit that has been certified by an independent public accountant, instead of by a PCAOB registered public accounting firm, for fiscal years ending before January 1, 2009. The SEC has not extended the deadline again, and this means annual audits for Broker-Dealers with cover fiscal year ends after December 31, 2008, must now comply with the Act, which require audits for Broker-Dealers to be issued by a PCAOB registered, public accounting firm.

Since the process of obtaining a new accounting firm is time consuming and has additional deadlines, both from a relationship, due diligence and regulatory point of view, we would recommend that all Broker-Dealers contact their accounting firm to confirm that they are now a PCAOB registered accounting firm. To the extent they are not PCOAB registered, you should take immediate action to obtain an accountant that is properly registered with the PCAOB, as the deadline for changing your accounting with FINRA and the SEC is fast approaching. In order to stay in compliance with respect to annual audits, the notification process related to the change of accounting must be concluded no later than December 1, 2009. To the extent your accounting firm is registered with the PCAOB, we would recommend that you obtain a copy of the PCAOB acceptance letter for your due dilegence file for the repective third party service provider file.

Should you have any questions or concerns, please feel free to contact Daniel E. LeGaye directly at 281-367-2454, or via email, or consult with your legal counsel or applicable third party consultant.

This legal update has been provided to you courtesy of The LeGaye Law Firm, P.C., 2203 Timberloch Drive, Suite 100, The Woodlands, Texas 77380. Visit our web site at www.legayelaw.com.