WASHINGTON (AP) — A watchdog agency for the accounting industry says it's found numerous flaws in how some firms audited securities brokerages.

The five-month inspection by the Public Company Accounting Oversight Board covered a sample of 23 audits of brokerages done by 10 accounting firms. The inspection found deficiencies in all 23 audits, the board said in a report Monday. The report covered the board's first such inspection.

The auditing firms' lapses included a failure to adequately verify how much financial cushion the brokerages held against potential losses and the accuracy of revenue figures the brokerages provided.

The report didn't name the auditing firms or the brokerages whose audits were reviewed. But the brokerages whose audits were inspected are a small slice of the 4,400 or so brokerage firms registered with the Securities and Exchange Commission that serve individual and institutional investors.

The board said its inspection results show that some auditors weren't properly fulfilling their duty to provide an independent check on the brokerages.

"Even with this small group of audits inspected thus far, the results are disturbing," board member Jeanette Franzel, a former managing director of the Government Accountability Office, the auditing agency for the federal government, said in a statement.

The other members of the five-member accounting board are a former SEC general counsel, a former accounting firm executive, a lawyer and a former Senate aide.

Lynn Turner, a former SEC chief accountant, called the frequency of deficiencies discovered by the inspection "mind boggling." He said it was especially striking coming after Bernard Madoff's massive investment fraud, which raised pointed questions about the role of brokerage firms' auditors.

"Hopefully other audit firms learn quickly from this inspection report and learn how to, and do in fact, perform audits as they should be performed," Turner said in an emailed message.

Congress created the oversight board in 2002 to replace the accounting industry's own regulators in response to the wave of business scandals that began with Enron Corp. The board has subpoena power and authority to discipline accountants. Its operations are funded by fees on public companies, which pay according to their size.

The board has been inspecting accounting firms' audits of public companies since it started operations in 2003. In February, it fined a major accounting firm, Ernst & Young, $2 million for alleged lapses in three audits of Medicis Pharmaceutical Corp. It was the largest fine the board has levied.

The financial regulatory law enacted in 2010 expanded the board's authority to include inspecting audits of securities brokerage firms.

Some of the flaws the board revealed Monday relate to brokerages' protection of customer money. For example, some securities brokerages are required to maintain a reserve account for customers' funds. In all 14 audits of brokerages that claimed an exemption from that requirement, the accounting firms didn't properly verify that the brokerages were entitled to the exemption, the inspection found.

And in two of the nine audits involving brokerages that were required to maintain such accounts, the auditing firms failed to verify that the accounts were designated for customer use only.

The board says the flaws it found don't necessarily mean that the brokerages hadn't properly safeguarded customers' money. But the results show that the auditors weren't following standards for monitoring brokerages' compliance with federal rules, it said.

The inspection found that one accounting firm failed in two audits to maintain its independence from the brokerage firm it audited, in violation of SEC rules. The firm breached its independence by helping the brokerage prepare the financial statements it audited, the report said.

The accounting board's inspectors discussed the deficiencies they found with the accounting firms but took no disciplinary actions. If the board determines in future inspections that a firm failed to take appropriate action, it may be grounds for a disciplinary sanction, board spokeswoman Colleen Brennan said.

She said the board may report to the SEC and other regulators information on possible violations of law by brokerage firms.