Audit regulation changes to fall from Madoff scandal?
TheDeal.com asks this regarding the Bernard Madoff scandal: "What about those tough auditing rules imposed after the Enron and WorldCom scandals? Surely, such a massive fraud would light up enforcers' radar screens." Well, Sarbanes-Oxley as you know covers public companies, not private investment partnerships. And because the controversial audit firm Friehling & Horowitz with just 3 employees, did not audit public companies, it was not governed by the PCAOB.
But, as the TheDeal.com notes, big brokerages are "required to be audited by firms registered with the PCAOB. Yet the SEC provided a temporary reprieve to the rule for privately held brokerage firms and extended it several times." You can bet a lot will change at the regulatory level; loopholes will be closed.
- here's the article
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