Broker-dealers that take possession or control over customer funds and securities must comply with Securities Exchange Act (“SEA”) Rule 15c3-3 (“Rule 15c3-3”), Customer Protection. Such broker-dealers, also referred to as carrying or non-exempt broker-dealers, must implement internal controls over compliance with the SEC’s Financial Responsibility Rules, which include Rule 15c3-3, throughout the year. Non-exempt broker-dealers must file a compliance report with the Securities Exchange Commission (“SEC”) annually per SEC Rule 17a-5, Broker-Dealer Reports. That compliance report must be accompanied by an examination report issued by a Public Company Accounting Oversight Board (“PCAOB”) registered public accountant. In support of the examination report, the auditor must perform procedures over the internal controls over compliance with the financial responsibility rules in accordance with PCAOB Attestation Standard No. 1 (“AT No. 1”), Examination Engagements Regarding Compliance Reports of Brokers and Dealers. PCAOB inspections of non-exempt broker-dealer audits commonly focus on compliance with AT No. 1. Join two former PCAOB broker-dealer inspectors, as they discuss the financial responsibility rules, the requirements of AT No. 1, and common auditor examination pitfalls.