(Dow Jones) Large U.S. broker-dealers could be required to pay $1 million annually or more for costs related to audits required by the Dodd-Frank financial overhaul law, if a proposal by the nation's overseer of public-company audits becomes effective.

The Public Company Accounting Oversight Board, created as part of the Sarbanes-Oxley accounting reform law, voted on Tuesday to propose a plan that would create and fund a temporary inspection program in response to a Dodd-Fank requirement for inspections of auditors that examine broker dealers. Congress passed the 2002 Sarbanes-Oxley Act to combat corporate accounting scandals in the wake of collapses at Enron Corp. and WorldCom.

Sarbanes-Oxley required all broker-dealers to register with the PCAOB, but didn't give the board authority to oversee or take enforcement actions against firms that weren't publicly traded. Those firms became subject to registration in 2008.

The PCAOB proposal includes fees that it would charge broker-dealers to inspect their auditing firms. Fees, which would apply to about 460 of the nation's roughly 5,000 broker-dealers, would range from under $400 to $1.27 million, according to a PCAOB spokeswoman. The board would consider each firm's "tentative net capital," as directed by the Dodd-Frank Act, in determining whether a broker-dealer is subject to fees and, if so, the amount. Broker-dealers with $5 million or more in tentative net capital, as defined by the Dodd Frank Act, would be subject to fees. The largest fee---those over $1-million--would apply to three firms, she said.

The interim inspection plan considered Tuesday is "the first step down the road of turning that new authority into a functioning oversight program," said Daniel L. Goelzer, the PCAOB's acting chairman, on Tuesday in prepared comments. The PCAOB's new responsibilities will have a "significant effect" on its work, he said. More than 500 accounting firms registered with the PCAOB during the past two years because they audit broker-dealers.

Goelzer also questioned whether some types of firms that don't, in theory, have access to client funds, can ultimately be exempted from PCAOB oversight without "compromising investor protection."

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