Sinema, Cotton Introduce Bipartisan Legislation Providing Regulatory Relief for Arizona Small Businesses

May 25, 2022

WASHINGTON – Arizona senior Senator Kyrsten Sinema and Republican Senator Tom Cotton (Ark.) introduced the bipartisan Small Business Audit Correction Act.
“Providing relief to small businesses from regulations that were intended for larger, more sophisticated firms will promote economic growth and support Arizona jobs – allowing these Arizona small businesses to keep their doors open and help more Arizonans achieve financial security,” said Sinema.
“Requiring our small non-custodial broker-dealers to get the same audits required of public companies only results in higher costs and fewer small firms, and all because of a provision that wasn’t even supposed to be aimed at non-custodial firms. This bill will return audit requirements to the former standard, one appropriate for these kinds of firms and which will allow our small broker-dealers to expand and help create more jobs,” said Cotton.
“We are greatly appreciative to Senator Sinema for supporting small business in Arizona. Through her sponsorship this bill would reduce the extraordinary financial burden on small firms for an overly complex financial audit that was never intended for small financial firms that don’t take custody of any customer assets. Both the SEC & PCAOB have acknowledged that they have no data to demonstrate positive outcomes as a result of this one-size-fits all audit requirement, yet both entities acknowledge the increased burden on small firms, both financial and the human resource drain. This is a perfect example how Senator Sinema always puts serious thought, backed up by action, in representing her constituents,” said Mark Howells, Executive Chairman of M.S. Howells & Co.
“Being a small broker dealer, I applaud the efforts of Senator Sinema to care about small businesses and the costs that have skyrocketed and are putting us out of business. Since the beginning of the PCAOB audit requirements the cost of my firm’s audit has gone from $12k to $35k. This has become such a huge burden on small firms that many owners, like me, are facing the very real possibility of having to withdraw from FINRA and go out of business because of the unfair and disproportionately high costs for small companies. The PCAOB audits were intended for public companies, not small businesses like mine, and Senator Sinema’s decision to fight with and for Main Street businesses proves she really does care about Arizona small businesses, their owners, employees and customers,” said Dean Greenberg, President of Greenberg Financial Group.

The bipartisan Small Business Audit Correction Act provides tailored regulatory relief to Arizona small businesses by exempting small, privately-held broker-dealers in Arizona from costly, complex federal audit requirements that don’t make sense given that these firms do not take custody of client assets. Brokers given relief by this bill will still be required to submit audited financials to the Securities Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), and state securities regulators in accordance with the American Institute of Certified Public Accountants’ (AICPA) Generally Accepted Auditing Standards. This legislation cuts costs for small businesses by eliminating this unnecessary audit requirement, allowing them to reinvest that capital into creating jobs and expanding investor opportunities in Arizona.