The Public Company Accounting Oversight Board - 1193 Words

The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board (PCAOB) to assume the responsibility of overseeing the auditors of public companies. The PCAOB is a private-sector, non-profit corporation. It was established to protect the interests of investors and further the public interests in the preparation of informative, fair, and independent audit reports. (The PCAOB) Although the PCAOB is a private sector organization, it has many government-like regulatory functions. The PCAOB was created in response to an increasing number of accounting restatements by public companies during the 1990s and a series of recent high-profile scandals like Enron and WorldCom. Prior to the PCAOB, the audit industry was self-regulated†¦show more content†¦Many firms are upset by this rule because of its limitations. However, I believe that this new rule is a good idea. Previous engagements between firms and clients have been given a large notice of when the rule will be in ef fect. They are given plenty of time to finish their engagements. This new rule may allow small firms more possibilities to increase their clientele. We may be moving away from having a small number of large firms doing all the services to having many firms providing the services. Also, Rule 3523 will ensure independence. Another issue that has arisen since the establishment of the PCAOB is the increased compliance costs. In 2007, the PCAOB has been awarded a budget of 136,429,000 dollars by the SEC. Of that amount, 79,514,000 dollars will be used to pay for salaries. (The PCAOB) The PCAOBs budget is paid by public companies through fees and audit firms through fines. These fines can reach 100,000 dollars for individual auditors and up to 2 million dollars for audit firms. Many firms have increased their audit fees due to the increase in costs, partly due to the PCAOB. The PCAOB continues to grow each year. Their powers and responsibilities continue to grow, which in turn will lead to a larger budget. The SEC should take into consideration these additional fees for businesses and auditing firms when they determine the salaries of employees. The average salary for each employee is over 150,000 dollars, which is a substantialShow MoreRelatedThe Public Company Accounting Oversight Board774 Words   |  4 Pages Congress created the Public Company Accounting Oversight Board (PCAOB) or known as the Board, a nonprofit corporation in 2002 after Sarbanes- Oxley Act. The PCAOB purpose is to keep watch over audits of public companies in order to protect investors. Their responsibilities are broken into three main parts besides registering public accounting firms, the first one which is setting auditing standards by establishing what they need to do for audits, establishing quality controls, ethics, and independenceRead MorePublic Company Accounting Oversight Board1217 Words   |  5 PagesThis report provides information about the Public Company Accounting Oversight Board for Dr. Mack. The information includes the history and creation of the PCAOB, its structure, and its duties in today’s accounting world. The PCAOB is a nonprofit corporation created by congress. It was established by the Sarbanes-Oxley Act and was a response to the accounting scandals in the early 2000s. The SEC is authorized by congress to oversee the PCAOB’s operation. Additionally, the Securities and ExchangeRead MoreThe Public Company Accounting Oversight Board958 Words   |  4 Pagesestablished the Public Company Accounting Oversight Board (PCAOB) to regulate the audit industry to oversee accounting professionals who provided independent audit reports for publicly traded companies (SEC). Key responsibilities include: registering public accounting firms and establishing audit, quality control, ethics, independence, and other standards relating to public company audits (SEC). Conducting inspections, investigations, and disciplinary proceedings of registered accounting firms, as wellRead MorePublic Company Accounting Oversight Board1711 Words   |  7 PagesIntroduction Public Company Accounting Oversight Board (PCAOB), a nonprofit corporation that established by Congress and created by Sarbanes- Oxley Act, aims to supervise the audit of the public registered companies to make sure their reports conform the requirements of fairness and independence, in order to protect the interest of information users and investors (â€Å"PCAOB†, 2015). Actually, there are three major duties that PCAOB serves: setting auditing standards, inspecting registered public accountingRead MorePublic Company Accounting Oversight Board; Will It Protect Investors?1157 Words   |  5 PagesPublic Company Accounting Oversight Board; Will it Protect Investors? The Public Company Accounting Oversight Board (PCAOB) was created by Sarbanes-Oxley Act of 2002. This board was created to oversee the audit of public companies, subject to the securities laws, in order to protect the interests of investors (15 USC 7201, 2002). It was created in wake of the recent financial scandals of Enron, WorldCom, and Global Crossing to name a few. This Act established by Congress is to create an oversightRead More Public Company Accounting Oversight Board (PCAOB) - Will it Protect Investors?1109 Words   |  5 PagesPublic Company Accounting Oversight Board; Will it Protect Investors?   Ã‚  Ã‚  Ã‚  Ã‚  The Public Company Accounting Oversight Board (PCAOB) was created by Sarbanes-Oxley Act of 2002. This board was created to oversee the audit of public companies, subject to the securities laws, in order to protect the interests of investors (15 USC 7201, 2002). It was created in wake of the recent financial scandals of Enron, WorldCom, and Global Crossing to name a few. This â€Å"Act† established by Congress is to create anRead MoreFree Enterprise Fund Vs. Public Company Accounting Oversight Board700 Words   |  3 PagesIn the case of â€Å"Free Enterprise Fund v. Public Company Accounting Oversight Board† They were trying to determine what powers can reside over Public Company Accounting Oversight Board or also known as the PCAOB. They was disputing the fact that the President as no control over the board member since they are not appointed government officials and are not limited by government limitations. They are in fact in control over by the SEC, which stands for the securities and exchange commissions. In thisRead MoreThe Public Company Accounting Oversight Board2270 Words   |  10 PagesAbstract: On October 11, 2011, the Public Company Accounting Oversight Board (PCAOB) proposed a new rule. The rule is meant to name the engagement partner and other key participants who play a role in preparing audit reports. PCAOB believes that new rule would help to get more information and would be useful to investors, creditors and other financial statements users. After six years of debate over the intended and unintended consequences the PCAOB concluded and issued the rule on December 15Read MoreExtra Credit639 Words   |  3 Pagescreation of the SEC? Why was the SEC created? The SEC was created due to the stock market crash of 1929 which led to the great depression. The SEC was created to protect investors in security exchanges such as the stock market. It is responsible for oversight of both private investment and corporate investment dealings. b. What are the five divisions of the SEC? Briefly describe the purpose of each. The five divisions of the SEC are corporate finance, enforcement, economic and risk analysis, investmentRead MoreEthical and Legal Obligations in Accounting1329 Words   |  6 PagesMarshall (2004), accounting is the process of identifying, measuring, and communicating economic information about an organization for the purpose of making decisions and informed judgements (p. 3). Specifically, financial accounting refers to the process that results in the preparation and reporting of financial statements for an entity (Marshall, McManus, Viele, p. 5). While many entities prepare their own financial statements, firms can also contract with a public accounting firm or a Certified