Sec and public company accounting oversight board relationship

Section 3. Auditing and Related Professional Practice Standards

sec and public company accounting oversight board relationship

The Public Company Accounting Oversight Board (PCAOB) is a private-sector, nonprofit The Board's budget, approved by the SEC each year, is funded by fees paid by the companies and broker-dealers who rely on the audit firms overseen. In connection with the preparation or issuance of any audit report, a registered (c) Unless directed otherwise by the Board, a registered public accounting firm must (a) the AICPA's Auditing Standards Board's Statements on Quality Control (4) Each entity in the investment company complex when the audit client is an. The Public Company Accounting Oversight Board (also known as the PCAOB) is a private-sector, nonprofit corporation created by the.

PCAOB May 14, ] d iii Dealer The term "dealer" means a dealer as defined in Section 3 a 5 of the Exchange Actthat is required to file a balance sheet, income statement, or other financial statement under Section 17 e 1 A of that Act, where such balance sheet, income statement, or financial statement is required to be certified by a registered public accounting firm. PCAOB July 16, ] f ii Foreign Registered Public Accounting Firm The term "foreign registered public accounting firm" means a foreign public accounting firm that is a registered public accounting firm.

PCAOB August 30, ] f iii Foreign Auditor Oversight Authority The term "foreign auditor oversight authority" means any governmental body or other entity empowered by a foreign government to conduct inspections of public accounting firms or otherwise to administer or enforce laws related to the regulation of public accounting firms.

PCAOB May 2, ] h i Hearing Officer The term "hearing officer" means a person, other than a Board member or staff of the interested division, duly authorized by the Board to preside at a hearing.

Section 1. General Provisions

PCAOB May 14, ] i i Issuer Market Capitalization The terms "issuer market capitalization" and "market capitalization of an issuer" mean — 1 Except as provided in paragraph i i 2 of this rule, the aggregate market value of all classes of an issuer's voting and non-voting common equity that trade in the United States; or 2 With respect to an issuer: PCAOB August 1, ] i iii Issuer The term "issuer" means an issuer as defined in Section 3 of the Exchange Actthe securities of which are registered under Section 12 of that Act, or that is required to file reports under Section 15 d of that Act, or that files or has filed a registration statement that has not yet become effective under the Securities Act ofand that it has not withdrawn.

PCAOB July 16, ] i iv Interested Division The term "interested division" means a division or office of the Board assigned primary responsibility by the Board to participate in a particular proceeding.

sec and public company accounting oversight board relationship

PCAOB May 14, ] i v Issuer Accounting Support Fee The term "issuer accounting support fee" means the portion of the accounting support fee established by the Board that is to be allocated among issuers pursuant to the rules of the Board. PCAOB August 18, ] i vi Invoice The term "invoice" means the document sent by the Board to an issuer, broker, or dealer, pursuant to Rulesetting forth such issuer's, broker's, or dealer's share of the accounting support fee under Section of the Act and Rules, and PCAOB May 2, ] n ii Non-Audit Services The term "non-audit services" means all services other than audit services, other accounting services, and tax services.

Inspection The term "non-U. PCAOB August 30, ] o i Other Accounting Services The term "other accounting services" means assurance and related services that are reasonably related to the performance of the audit or review of the client's financial statements, other than audit services.

sec and public company accounting oversight board relationship

Section 2 a 9 C of the Act provides that, for purposes of, among other things, Section of the Act, and the Board's rules thereunder, the terms defined in Rule p i shall include any person associated, seeking to become associated, or formerly associated with a public accounting firm, except that: The term does not include non-audit services provided to non-audit clients. PCAOB May 2, ] p iii Public Accounting Firm The term "public accounting firm" means a proprietorship, partnership, incorporated association, corporation, limited liability company, limited liability partnership, or other legal entity that is engaged in the practice of public accounting or preparing or issuing audit reports.

PCAOB July 16, ] p iv Person The term "person" means any natural person or any business, legal or governmental entity or association.

sec and public company accounting oversight board relationship

PCAOB May 14, ] p v Party The term "party" means the interested division, any person named as a respondent in an order instituting proceedings or notice of a hearing, any applicant named in the caption of any order, or any person seeking Board review of a decision.

PCAOB May 2, ] p vi Professional Standards The term "professional standards" means — A accounting principles that are — i established by the standard setting body described in section 19 b of the Securities Act, or prescribed by the Commission under section 19 a of the Securities Act or section 13 b of the Exchange Act; and ii relevant to audit reports for particular issuers, brokers, or dealers, or dealt with in the quality control system of a particular registered public accounting firm; and B auditing standards, standards for attestation engagements, quality control policies and procedures, ethical and competency standards, and independence standards including rules implementing Title II of the Act that the Board or the Commission determines — i relate to the preparation or issuance of audit reports for issuers, brokers, or dealers; and ii are established or adopted by the Board under section a of the Act, or are promulgated as rules of the Commission.

Public Company Accounting Oversight Board

PCAOB July 16, ] r ii Rules or Rules of the Board The terms "Rules" or "Rules of the Board" mean the bylaws and rules of the Board as submitted to and approved, modified, or amended by the Commission in accordance with Section of the Act and those stated policies, practices, and interpretations of the Board that the Commission, by rule, may deem to be rules of the Board, as necessary or appropriate in the public interest or for the protection of investors.

PCAOB July 16, ] r iii Revocation The term "revocation" means a permanent disciplinary sanction terminating a firm's registration. PCAOB August 1, ] s ii Securities Laws The term "securities laws" means the provisions of the law referred to in Section 3 a 47 of the Exchange Act, as amended by the Act, and includes the rules, regulations, and orders issued by the Commission thereunder.

sec and public company accounting oversight board relationship

Auditors of public companies are prohibited by the Sarbanes-Oxley Act to provide non-audit services, such as consulting, to their audit clients. This prohibition was made as a result of allegations, in cases such as Enron and WorldCom, that auditors' independence from their clients' managers had been compromised because of the large fees that audit firms were earning from these ancillary services.

In addition, as part of the PCAOB's investigative powers, the Board may require that audit firms, or any person associated with an audit firm, provide testimony or documents in its or his or her possession. If the firm or person refuses to provide this testimony or these documents, the PCAOB may suspend or bar that person or entity from the public audit industry.

Public Company Accounting Oversight Board (PCAOB)

The Board's Office of the Chief Auditor advises the Board on the establishment of auditing and related professional practice standards. While a large part of these reports is made public called "Part I"portions of the inspection reports that deal with criticisms of, or potential defects in, the audit firm's quality control systems are not made public if the firm addresses those matters to the Board's satisfaction within 12 months after the report date.

Those portions are made public called "Part II"however, if 1 the Board determines that a firm's efforts to address the criticisms or potential defects were not satisfactory, or 2 the firm makes no submission evidencing any such efforts. In one of the most contentious SEC public hearings, these two Commissioners Harvey Goldschmid and Roel Campos publicly criticized the process of the appointment though not Webster himself.

An audio recording of this contentious October 25, SEC public hearing at which Webster's nomination was approved and debated can be heard at here. | Public Company Accounting Oversight Board (PCAOB)

Just a few weeks after Webster was appointed to the PCAOB, however, another controversy erupted when newspapers reported that Webster had served on the board audit committee of U.

Technologiesa high-technology company being investigated for accounting irregularities. Pitt, whose tenure as SEC Chair had already proven controversial, found himself in an untenable position. One of the claims made by Goldschmid during the rancorous October SEC hearing was that the candidates put forward by Pitt had not been properly vetted.