scholarly journals The PCAOB’s First Seven Years: A Retrospection

2010 ◽  
Vol 4 (1) ◽  
pp. A9-A20 ◽  
Author(s):  
Bill Gradison ◽  
Ron Boster
Keyword(s):  
Public Companies ◽  
The Public ◽  
Sarbanes Oxley ◽  
Public Company ◽  
Board Level

SUMMARY: The Public Company Accounting Oversight Board (PCAOB) turned seven years old in January 2010. Up until that date, it had spent more than three-quarters of a billion dollars of compulsory “fees” paid predominantly by larger public companies (issuers) to finance the specific mandate given it by the Sarbanes-Oxley Act of 2002.1 The authors were there from the beginning. We offer a Board-level perspective into the PCAOB’s key programs and policies.

scholarly journals Is The Pcaob a “Heavily Controlled Component” Of The Sec?: An Essential Question In The Constitutional Controversy

2009 ◽  
Vol 71 (3) ◽  
Author(s):  
Donna M. Nagy
Keyword(s):  
Supreme Court ◽  
Separation Of Powers ◽  
Free Enterprise ◽  
Public Companies ◽  
The Public ◽  
Sarbanes Oxley ◽  
Public Company ◽  
Essential Question ◽  
The U.S

The U.S. Supreme Court recently heard oral arguments in Free Enterprise Fund v. Public Company Accounting Oversight Board, described as “the most important separation-of-powers case regarding the President’s appointment and removal powers to reach the courts in the last 20 years.” Established by Congress as the cornerstone of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley” or the “Act”), the Public Company Accounting Oversight Board (the “PCAOB” or the “Board”) was structured as “a strong, independent board to oversee the conduct of the auditors of public companies.” Its principal mission was to prevent the type of auditing failures that contributed to the scandals at Enron, WorldCom, and numerous other public companies in the period leading up to the passage of the Act.

PCAOB Enforcements: A Review of the First Three Years

2009 ◽  
Vol 3 (2) ◽  
pp. A15-A34 ◽  
Author(s):  
David L. Gilbertson ◽  
Terri L. Herron
Keyword(s):  
Disciplinary Action ◽  
Public Companies ◽  
The Public ◽  
Sarbanes Oxley ◽  
Public Company

SUMMARY: The Sarbanes-Oxley Act of 2002 created the Public Company Accounting Oversight Board (hereafter, PCAOB) to oversee audits of public companies. When violations of the Sarbanes-Oxley Act or PCAOB rules are found, the PCAOB may impose sanctions as severe as revoking a firm’s registration or barring a person from participating in audits of public companies. This paper describes the PCAOB enforcement actions issued through 2008. We examine characteristics of the disciplined firms, their PCAOB inspections, the related issuer clients, and the circumstances that resulted in the disciplinary proceedings. Consistent with prior research, we find that firms with issues rising to the level of disciplinary action generally have longer inspections and more audit deficiencies than firms with inspection deficiencies not resulting in sanctions. Disciplined firms also tend to have fewer partners, audit more SEC issuers, and have clients that are smaller and less financially sound.

scholarly journals Increasing Transparency: A Prototype of the Nonpublic Portions of PCAOB Large-Firm Inspection Reports

2011 ◽  
Vol 5 (1) ◽  
pp. A1-A21 ◽  
Author(s):  
Rachael J. Evans ◽  
Ronald S. Boster ◽  
Bill Gradison
Keyword(s):  
Quality Control ◽  
Large Firm ◽  
Public Companies ◽  
Accounting Firms ◽  
The Public ◽  
Sarbanes Oxley ◽  
Public Company ◽  
Audit Reports

SUMMARY:The Sarbanes–Oxley Act of 2002 created the Public Company Accounting Oversight Board (PCAOB) and requires it to conduct annual inspections of accounting firms that regularly provide audit reports for more than 100 public companies (issuers). Certain information in these reports is, by law, nonpublic—in particular, findings of “quality control” (QC) deficiencies. Having access to nonpublic portions of PCAOB inspection reports, the authors create an illustrative example of a nonpublic portion of a large-firm inspection report, albeit with specific firms and issuers de-identified.

A Decade after Sarbanes-Oxley: The Need for Ongoing Vigilance, Monitoring, and Research

2014 ◽  
Vol 28 (4) ◽  
pp. 917-930 ◽  
Author(s):  
Jeanette M. Franzel
Keyword(s):  
Audit Quality ◽  
Warning Signs ◽  
Regulatory Regime ◽  
Government Accountability ◽  
Public Companies ◽  
The Public ◽  
Sarbanes Oxley ◽  
Public Company ◽  
The Impact ◽  
Audit Independence

SYNOPSIS After more than a decade since passage of the Sarbanes-Oxley Act and the creation of the Public Company Accounting Oversight Board (PCAOB), it is appropriate and necessary to ask questions about the present state of audit quality and evaluate the impact and effectiveness of PCAOB's oversight programs. Written from the viewpoint of a current PCAOB Board member and former Managing Director of the U.S. Government Accountability Office (GAO), this paper discusses the warning signs of serious auditing problems in the years preceding the Act, and the role that the GAO played in analyzing those risks and calling for greater oversight of the accounting profession's auditing public companies. We must be vigilant and continually examine the activities of the auditing profession and the regulatory regime to ensure that audit independence and audit quality remain front and center to ensure investor protection and safeguard the public interest. Academic researchers play a key role in this system of vigilance. This paper provides views on many areas within the auditing profession that would benefit from further research and analysis, as well as opportunities for research that could be useful to the PCAOB as it considers current and future regulatory priorities.

Auditing the Auditors: A Case on PCAOB Inspection Reports of Registered Public Accounting Firms

2009 ◽  
Vol 3 (1) ◽  
pp. B1-B18 ◽  
Author(s):  
Brian Daugherty ◽  
Marshall K. Pitman
Keyword(s):  
Public Accounting ◽  
Public Companies ◽  
Accounting Firms ◽  
Audit Firm ◽  
The Public ◽  
Sarbanes Oxley ◽  
Public Company ◽  
Public Accounting Firms ◽  
Audit Evidence ◽  
Inspection Process

SUMMARY: We present a timely practice-oriented case related to the inspection process of registered firms by the Public Company Accounting Oversight Board (PCAOB). This case allows auditing students an opportunity to explore the unique challenges that public accounting firms auditing U.S. public companies face with respect to the PCAOB inspection process. The case focuses on large and small registered firms (inspected annually and triennially, respectively) receiving an inspection report where the PCAOB identified certain matters considered to be audit deficiencies of such significance that the inspection team believed the audit firm did not obtain sufficient competent evidential matter to support the auditor’s opinion. The case exposes students to the PCAOB inspection process, highlights many deficiencies noted to date by the PCAOB inspectors, and emphasizes the importance of sufficient and appropriately documented audit evidence to support audit opinions. By reviewing ‘deficient’ inspection reports, students gain an appreciation for common audit deficiencies as well as the subjective nature of portions of the authoritative literature and the inspection process itself. The case reinforces students’ understanding of the practical matters involved in appropriately obtaining, evaluating, and documenting audit evidence, as well as educates students on the PCAOB inspection process in order to address important competencies required of Sarbanes-Oxley era audit professionals.

scholarly journals The Goals and Promise of the Sarbanes–Oxley Act

2007 ◽  
Vol 21 (1) ◽  
pp. 91-116 ◽  
Author(s):  
John C Coates
Keyword(s):  
Financial Reporting ◽  
Internal Controls ◽  
Public Institution ◽  
Section 404 ◽  
Public Companies ◽  
The Public ◽  
Corporate Scandals ◽  
Sarbanes Oxley ◽  
Public Company

The primary goal of the SarbanesOxley Act was to fix auditing of U.S. public companies, consistent with its full, official name: the Public Company Accounting Reform and Investor Protection Act of 2002. By consensus, auditing had been working poorly, and increasingly so. The most important, and most promising, part of SarbanesOxley was the creation of a unique, quasi-public institution to oversee and regulate auditing, the Public Company Accounting Oversight Board (PCAOB). In controversial section 404, the law also created new disclosure-based incentives for firms to spend money on internal controls, above increases that would have occurred after the corporate scandals of the early 2000s. In exchange for these higher costs, which have already fallen substantially, SarbanesOxley promises a variety of long-term benefits. Investors will face a lower risk of losses from fraud and theft, and benefit from more reliable financial reporting, greater transparency, and accountability. Public companies will pay a lower cost of capital, and the economy will benefit because of a better allocation of resources and faster growth. SarbanesOxley remains a work in progress -- section 404 in particular was implemented too aggressively - but reformers should push for continued improvements in its implementation, by PCAOB, rather than for repeal of the legislation itself.

Comments by the Auditing Standards Committee of the Auditing Section of the American Accounting Association on the PCAOB Rulemaking Docket Matter No. 31: PCAOB Release No. 2010-005, Application of the “Failure to Supervise” Provision of the Sarbanes-Oxley Act of 2002 and Solicitation of Comment on Rulemaking Concepts

2011 ◽  
Vol 5 (1) ◽  
pp. C11-C15 ◽  
Author(s):  
Joseph Brazel ◽  
James Bierstaker ◽  
Paul Caster ◽  
Brad Reed
Keyword(s):  
Audit Quality ◽  
Exposure Period ◽  
Public Accounting ◽  
Accounting Firms ◽  
Accounting Firm ◽  
The Public ◽  
Sarbanes Oxley ◽  
Public Company ◽  
Auditing Standards ◽  
Supervision Practices

SUMMARY: Recently, the Public Company Accounting Oversight Board (“PCAOB” or “Board”) issued a release to address, in two ways, issues relating to the responsibilities of a registered public accounting firm and its supervisory personnel with respect to supervision. First, the release reminds registered firms and associated persons of, and highlights the scope of, Section 105(c)(6) of the Sarbanes-Oxley Act of 2002 (“the Act”), which authorizes the Board to impose sanctions on registered public accounting firms and their supervisory personnel for failing to supervise reasonably an associated person who has violated certain laws, rules, or standards. Second, the release discusses and seeks comment on conceptual approaches to rulemaking that might complement the application of Section 105(c)(6) and, through increased accountability, lead to improved supervision practices and, consequently, improved audit quality. The PCAOB provided for a 91-day exposure period (from August 5, 2010, to November 3, 2010) for interested parties to examine and provide comments on the conceptual approaches to rulemaking that might complement the application of Section 105(c)(6). The Auditing Standards Committee of the Auditing Section of the American Accounting Association provided the comments in the letter below to the PCAOB on the PCAOB Release No. 2010-005, Application of the “Failure to Supervise” Provision of the Sarbanes-Oxley Act of 2002 and Solicitation of Comment on Rulemaking Concepts.

The Public Company Transformed

2018 ◽  
Author(s):  
Brian Cheffins
Keyword(s):  
World War Ii ◽  
Dominant Role ◽  
Departure Point ◽  
Public Companies ◽  
Managerial Capitalism ◽  
The Public ◽  
Corporate Scandals ◽  
Public Company ◽  
The Board Of Directors ◽  
History Of

The publicly traded company has played a dominant role in the American economy for decades. The Public Company Transformed examines the history of the American public company from the mid-twentieth century through to the present day. The analysis is oriented around constraints that have affected the discretion available to public company executives, such as monitoring by the board of directors, activism by shareholders, complying with regulation, dealings with unions, and pressure from competitors. The chronological departure point is the managerial capitalism era, which prevailed in large American corporations following World War II. Managerial capitalism’s rise, its 1950s and 1960s heyday, and its fall in the 1970s and 1980s are canvassed. Prosperity that American public companies and their executives enjoyed during the 1990s is described, as is a reversal of fortunes in the 2000s precipitated by corporate scandals and the financial crisis of 2008. The Public Company Transformed concludes by offering conjectures on the future of the public corporation, indicating in so doing that predictions the public company will soon be an afterthought are likely to be proved incorrect.

scholarly journals Public Company as a Subject of Financial Law

2020 ◽  
Vol 15 (11) ◽  
pp. 133-139
Author(s):  
N. I. Zemlyanskaya
Keyword(s):  
Legal Status ◽  
Public Law ◽  
Budget Process ◽  
Public Companies ◽  
Non Profit ◽  
Legal Personality ◽  
The Public ◽  
Public Company ◽  
Non Profit Organizations

The paper substantiates the need to consider public companies as a subject of financial law. This is due to the peculiarities of these non-profit organizations’ legal status and their implementation of the corresponding financial and legal statuses. The author gives particular attention to certain aspects of the financial activities of the public law company "Fund for the Protection of the Rights of Citizens — Participants in Shared Construction". The author notes that, as a subject of financial law, a public law company should be characterized by its participation in various types of financial legal relations: budgetary, tax, etc. For this, it is endowed with a special legal personality, which is expressed in the granting of appropriate powers (rights and obligations necessary for the implementation of its tasks and functions), enshrined in the regulatory legal acts regulating its activities. Based on the generally accepted thesis about the economic (monetary) nature of financial legal relations, it can be argued that most financial legal relations with the participation of a public law company are associated with its property. The study made it possible to consider a public law company as a subject of financial law, which implements the corresponding financial and legal statuses in financial legal relations: a non-participant in the budget process, a taxpayer, a tax agent, etc.

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