Many financial auditors are failing to properly check for accounting fraud risks at U.S. broker-dealers or test controls over customer funds, new inspections mandated by Congress after Bernard Madoff's massive Ponzi scheme have found. In its second inspection report on broker-dealer audits, the Public Company Accounting Oversight Board, an auditor watchdog, said it found problems at 95 percent of the 60 audits it checked. The results were similar to the first round of inspections conducted last year "and in one word, disappointing," PCAOB board member Jay Hanson said on a conference call with reporters. The results do not necessarily mean that there were problems at broker-dealers, just that auditors did not do enough work for inspectors to tell, Hanson said. Regulators have stepped up oversight of broker-dealers, the firms used by millions of investors to trade stocks, since Madoff was arrested in 2008 for running a fraud of up to $65 billion at his investment advisory firm. Madoff,
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