All accountants, in the US and foreign, that
provides audited financial statements for public companies registered
with the SEC (Securities and Exchange Commission) must be registered
with the Public Company Accounting Oversight Board (PCAOB), sometimes
referred to as Peekaboo. The PCAOB is a private-sector, nonprofit
corporation that was created by the Sarbanes-Oxley Act of 2002 which is
under the jurisdiction of the SEC. The Sarbanes-Oxley Act and the
creation of the PCAOB were a result of the accounting fraud scandals of
Enron and WorldCom.
Only Certified Public Accountants (CPA's)
can prepare audited financial statements on
behalf of a business or non-profit organization. In order for a
non-certified accountant to become a CPA, the accountant needs to work
for an accounting firm for a few years, acquire five hundred hours of
auditing time, and pass a test from the American Institute of Certified
Public Accountants as well as from their state. A CPA also must take
120 hours of continuing education courses every three years to maintain
their license.
The purpose of the Public Company Accounting
Oversight Board is to oversee auditors, (accounting firms, CPA’s,
accountants) of public companies in order to protect the interests of
investors and further the public interest in the preparation of
informative, fair, and independent audited financial statements. The
PCAOB’s goal is to improve the quality of audited financial statements,
reduce the risk of auditing failures, and increase public trust in
financial reporting processes and of the auditing profession. The PCAOB
has established auditing, quality control, ethics, and independence
standards to be used by registered public accounting firms and their
respective accountants in the preparation of audited financial
statements for publicly traded companies, as required by the
Sarbanes-Oxley Act of 2002 and the rules of the Securities and Exchange
Commission (SEC).
The Sarbanes-Oxley Act of 2002 requires the PCAOB
to: register all accounting firms, CPA’s, and accountants that audit
public companies; inspect all registered firms and their accountants
annually for those who annually audit over 100 public companies and a
minimum of once every three years for those that audit under 100,
assess the degree to which the firms and their accountants comply with
the act, the rules of the PCAOB and the SEC, professional standards in
connection with the performance and issuance of audited financial
statements and attest services; related matters involving public
companies, and investigate and discipline any firms and their
accountants whom are in violation of specific laws or standards. All
firms and their accountants are still required to have peer review of
their auditing and accounting practice in order to satisfy the American
Institute of Certified Public Accountants (AICPA) membership, federal
regulatory (Generally Accepted Auditing Standards) and/or state
licensing requirements. There are currently over 2,000 public firms
registered with the PCAOB, with more pending registration. A list of
current and pending registered firms can be found on the PCAOB website.
The PCAOB currently has pending a requirement that
all registered firms and accountants submit an annual report on Form 2,
provided on the PCAOB website, by June 30th, except for those firms and
accountants that have been registered between April 1st and June 30th
of that year. Also they will be required to pay an annual fee to the
PCAOB by July 31st. As these requirements are still pending approval,
the annual report and fees are not required for the 2009 calendar year
deadlines. In these reports the registered accountants must provide
various information for the year including: audited financial statement
reports issued during the year; disciplinary history of any accountants
that joined the firm during the year; a break down of the fees for
services provided to all clients during the year, showing the
percentage of the fees billed to public audit clients for audit
services, other accounting services, tax services, and non-audit
services. The PCAOB also requires registered accountants to submit
special reports on Form 3 within 30 days of the occurrence of the
special event. Such special events include change of name or contact
information, withdrawal of an audited financial statement by an auditor
if the client did not report withdrawal in the 8-K filing with the SEC,
and if legal, administrative, or disciplinary action have been taken
again the firm or its related accountants. These reports, along with
reports from the PCAOB on its inspections of public company audits will
be available to the public on their website.
It is the responsibility of the registered
accountants that audit financial statements for public companies to
provide accurate and independent reports. By following the rules and
regulations of the PCAOB, AICPA, and GAAP, registered accountants can
provide the highest quality of audited financial statements that fairly
and accurately represent the public company, detect material
misstatements and false or missing information caused by fraud, and
protect the interest of investors.
Article Source:
http://www.articlesbase.com/accounting-articles/public-company-accounting-
oversight-board-registered-accountants-1022640.html About the Author
Neil Rischall is the CPA behind the CPABookkeepers
site which has a wealth of information about audited
financial statements as well as all services provided by a Certified Public
Accountant. |
