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Sample Letter Requesting Legislative Support for the Small Business Audit Correction Act Bills





Re    The Small Business Audit Correction Act [Bill Numbers: H.R. 6021 and S. 3004]


The regulatory burden for small businesses in my industry is substantial, and it has gotten to a point where small firms are struggling to survive. While we have seen increases in regulations in many areas, possibly the most unreasonable and unfair is that a small, privately held, non-custodial brokerage firm like mine is required by law and regulation to hire an expensive Public Company Accounting Oversight Board (PCAOB) registered audit firm. 

Prior to Sarbanes-Oxley, as amended by Dodd-Frank, Broker/Dealers were required to hire AICPA registered auditors who followed Generally Accepted Auditing Standards (GAAS) when conducting Broker/Dealer annual audits. Following the enactment of the Acts Broker/Dealers, irrespective of size, are required to hire a Public Company Accounting Oversight Board-registered auditor who follows the PCAOB-defined set of audit standards, which are markedly different and significantly more complex than GAAS. The reason they are more complex is because they were designed and intended for use in the performance of financial audits of public companies with public shareholders, not privately-owned small businesses like ours. We request a return to the more appropriate AICPA Generally Accepted Auditing Standards.

The PCAOB audit requirement makes sense for public companies like Apple and Broker/Dealers that carry customer funds or securities, like Morgan Stanley, because the investing public and markets are potentially at much greater risk from these companies. Conversely, the PCAOB requirements make no sense for privately-held, small non-custodial firms that do not carry customer funds or securities - companies like mine. Currently, a 3-person small business is held to the same standards as Merrill Lynch; this is not right, fair or reasonable. 

The one-size-fits-all PCAOB audit standards that were designed for significantly more complex companies, and are priced accordingly, have been devastating to small businesses around the country. We simply cannot sustain the human and financial resource burden that these audits place on our small firms and we need legislative relief, and we need it now.

The Small Business Audit Correction Act [H.R. 6021 and S. 3004] therefore requests a specific exemption for privately held, small non-custodial brokers and dealers in good standing from the Title One of Sarbanes-Oxley requirement to hire a Public Company Accounting Oversight Board (PCAOB)-registered audit firm.

I am one of your small business owner and operator constituents and I am asking for your help with this bipartisan issue of helping small businesses. Please help my firm and our community of small businesses by supporting our efforts to get the Small Business Audit Correction Act included in the HFSC June markups, supported in Committee [H.R. 6021 and S. 3004], brought to the floor of the House and Senate, and passed. Passing this Act will provide significant and much needed relief for small businesses and our customers in our state and around the country. 

Thank you,


Paige Pierce