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What is PCAOB(public company accounting oversight board?
The PCAOB is a private-sector, non-profit corporation, created by the Sarbanes-Oxley Act of 2002, to oversee the auditors of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports.
The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and the public interest by promoting informative, accurate, and independent audit reports. The PCAOB also oversees the audits of broker-dealers, including compliance reports filed pursuant to federal securities laws, to promote investor protection. The Sarbanes-Oxley Act of 2002, which created the PCAOB, required that auditors of U.S. public companies be subject to external and independent oversight for the first time in history. Previously, the profession was self-regulated. The five members of the PCAOB Board, including the Chairman, are appointed to staggered five-year terms by the Securities and Exchange Commission (SEC), after consultation with the Chairman of the Board of Governors of the Federal Reserve System and the Secretary of the Treasury. The SEC has oversight authority over the PCAOB, including the approval of the Board’s rules, standards, and budget. The Act established funding for PCAOB activities, primarily through annual fees assessed on public companies in proportion to their market capitalization and on brokers and dealers based on their net
All accounting firms that wish to prepare or issue audit reports on U.S. public companies (or to participate in such audits) must register with the PCAOB. The PCAOB Registration Page gives a list of registered accounting firms, forms, examples, FAQs, other registration documentation, and a link to online registration.
Its Inspections section contains information about and reports on the Board's continuing program of inspections of registered public accounting firms. Its Enforcement section explains its approach to investigations and includes lists of Disciplinary Proceedings.
PCAOB Inspections The PCAOB is directed by Section 104 of the Sarbanes-Oxley Act of 2002 to conduct a continuing program of inspections to assess the degree to which each registered firm and its associated persons comply with the Act, the rules of the PCAOB and the SEC, and professional standards in connection with the performance of audits, the issuance of audit reports, and related matters involving public companies.
Firms that are registered with the PCAOB may be subject to its inspection program, which will only evaluate the SEC issuer or public company audit practice. All firms will continue to require peer review of the rest of their auditing and accounting practice in order to satisfy AICPA membership, federal regulatory (e.g., Generally Accepted Government Auditing Standards) and/or state licensing requirements
Inspected Firms
As of July 27, 2012, 2,398 public accounting firms, including U.S. firms and non-U.S. firms, are registered with the PCAOB. The PCAOB conducts regular, periodic inspections of hundreds of those firms, but not all of those firms. It should not be assumed or expected that a firm registered with the PCAOB is, or necessarily will be, inspected by the PCAOB.
McGladrey's PCAOB Inspection Report Is Pretty Awful
The PCAOB continues tearing through audit firms like a Texas twister on a random Tuesday during tax season, as it unleashed its fury on McGladrey yesterday. How bad was it? Well, Deloitte can certainly feel better about itself. The Board reported deficiencies in nine of the nineteen (~47%) audits inspected. Deloitte, if you remember, had deficiencies in 26 out of 58 (~45%) of the audits inspected, worst of the Big 4, but Mickey G's has managed to top everyone by creeping even closer to the 50% barrier. Here's the full coroner's report for some