Introduction to PCAOB

To conserve the interest of investors and stakeholders through providing reliable, correct,
informative, and independent audit reports, a non-profit organization is established which the
Public Company Accounting Oversight Board (PCAOB) is.

It’s the first time in accounting history that audits of public companies of the United States are
responsible for free and extend … for this purpose.
Almost eighteen years ago from today, on July 30, 2002, PCAOB was formed in Washington,
DC, USA.
United States Security and Exchange Commission (SEC) is the controlling authority of PCAOB.
It’s all rules and regulations are needed to … by SEC.

PCAOB has four main responsibilities according to the Skiable Oxley Act (2002).

1. Those accounting firms that audit public companies of US Securities marketing give
them registration is the responsibility of PCAOB.

2. PCAOB inspects public accounting firms that are registered.

3. Auditing and its attestation establishment is also a task of PCAOB (including QC and
ethics)

4. And setting the parameter for those firms which are registered.

Organizational Overview
 As SEC, USA control and guide PCAOB, SEC appoints all the member of PCAOB. It’s formed
with five board members. One of them is the chairman. 

SEC doesn’t appoint the board members alone. It appoints the member with the consulting
chairman of the board of governor of the Federal Reserve System and with the secretary of the
treasury. 

From the five board members:

1. One is a chairman
2. Two board members
3. Two members only
(N.B: All of them must be CPAs)
The chairman at the board … he also becomes the board member. Then, he is suspended from
any kind of CPA related activities for the next five years from he is being appointed. The board
consists of 800 employees and its territory at 11 regional offices in different states. 

The funding of the PCASOB is funded by the audit relying upon companies and broker-dealers
and the budget approved by SEC, USA. 

Mr. William P. Dunce is the present chairman of PCAOB. He is elected as a chairman on

January 02, 2018. He is appointed by the SEC.

A prominent lawyer and former director of FBI and CIA Mr. William H. Webster is the first
chairman of PCAOB.
  Mission, Vision & Core Values
Mission
The PCAOB oversees the audits of public companies and SEC-registered brokers and dealers to protect
investors and further the public interest in the preparation of informative, accurate, and independent audit
reports. 

Vision
The PCAOB will be a trusted leader that promotes high-quality auditing through forward-looking,
responsive, and innovative oversight. At all times, we will act with integrity, pursue excellence, operate
with effectiveness, embrace collaboration, and demand accountability.
Core Values
To acquire the objective, the PCAOB has some core values. Those are illustrated below:

1. Teamwork: PCAOB Team Consists of a group of energetic, experienced, qualified, and talented
professionals who0 work in such an environment depending on corporation and trust.

2. Fairness: Those public accounting farms are registered and associated with PCAOB treat them
fair, neutral, and in a compatible manner.

3. Excellence: I always want to do well in their sector. For pursui9ng this aspect, they combined
many professionals and trained them to enhance their oversight and activities.
 
4. Public Interest: Securing public interest is an important task of PCAOB. Because they inspect
and oversee public company’s audit report. So, providing an unqualified report, they secure the
public interest. 

5. Effectiveness: The budget they get from public companies approved by the SEC. By this
funding, PCAOB tries to handle its staff effectively and efficiently. 

6. Flexibility and Innovation: With its huge task force, PCAOB always try to do its activities
flexibly and innovatively.  

7. Integrity: It’s all officials, management, staff are bound to obey the standard ethical code. The
staff must be honest. So, they can do the work with integrity. 

8. Accountability: To acquire its mission and vision, all the people associated with PCAOB are
responsible for their work what they do regarding the audit. 
Goals and Objectives of PCAOB:
Sarbanes Oxley Act creates the Public Company Accounting Oversight Board (PCAOB). It has been
created to take care of the auditors of public companies. Moreover, this institution has been created to
fulfill some specific goals and objectives.

Goal 1:
- To enhance the confidence level of investors by using an effective supervisory pattern
over registered public accounting firms so that investors can keep trust in the audited
financial statements.

Objectives:
- Establishing a way to assess the risk which will inspire to reveal accounting and auditing
risks and to solve these issues.
- Finding out risks regarding public accounting firms, evaluating the procedures of firms
and activities of the firm.
- Investigating the feedback of the firms.
- Operating an effective procedure which will find out the risk leading to audit failure and
risk areas so that board can take initiative to improve their specific areas.
- Establishing well-integrated rules and regulations to ensure a quality audit.
- Recognizing those grounds where public accounting firms and officials involved in audit
activities failed to make quality audit and taking the initiative to resolve those problems.
- Taking action against the violations of PCAOB’s standards.

Goal 2:
- Investigating the overall result regarding PCAOB’s overseeing activities and notifying
the participants and other groups related to the public accounting firms about activities
and practices of PCAOB.

Objectives:
- Promoting effective strategy to emphasize the issues related to the issuer, market
participants, and recognizing such persons who can engage the outsides with public
accounting firms in accordance with PCAOB standards.
- Emphasizing on issues related to public accounting clients, and quality audit
- Assessing contracts with registered firms whether contracts are made or not.
- Conducting useful attempt to those firms which are not under PCAOB annual inspection
and giving guidance and materials for those auditors who are not under PCAO’s control.
Goal 3:
- Further emphasizing the efforts of the auditor of public accounting firms so that they
could be more effective and efficient in all over the world and the United States.

Objectives:
- Improving auditor’s efficiency through coordinating with US organizations such as SEC,
FASB, etc.
- Conducting communication with standard-setting related bodies such as regulatory
agencies and professional bodies.
- Operating different activities with international auditing bodies so that non-US registered
public accounting firms should be facilitated.
- Emphasizing international efforts by which auditor’s activities, auditor’s practices, and
auditing regulations should be improved.

Goal 4:
- PCAOB should be conducted in a specified method which will be able to maintain its
public mission to keep its responsibility on its resource.

Objectives:
- Making highly qualified ones got the chance and continuing the procedure and
recruitment.
- Overviewing the current recruitment procedure and bringing changes in the recruitment
procedure as needed to fulfill the recruitment objectives.
- Continuing to oversee opportunities and recruitment.
- Continuing to oversee the opportunity and remuneration so that the organization could be
the best choice.
- Managing or obtaining its mission and goal so that it could operate a strong relationship
among internal communication and bringing modification in relationship structure as
needed to achieve its mission.
- Improving the whole procedure by using information technology and spreading
information across the organization and making information available to all of the
officials to keep them updated.
- Continuing to maintain the PCAOB’s standard and accountability and improving those
standards as needed to obtain the goal.
- Overviewing different strategies, initiatives, and objectives to adjust priority.
 - Creating a framework for implementing PCAOB’s strategic plan.

Powers of PCAOB :
The PCAOB has the following powers:

 Checking registered public accounting firms.

 Investigating registered public accounting firms and persons related to such firms
regarding disciplinary proceedings and imposing sanctions.
 Placing its offices, continuing its operation, and playing a big role in all circumstances of
the US regardless of the criteria of state law.
 Registering public accounting firms involving in preparing audit reports for issuers.
 Establishing several standards such as auditing standards, quality control standards,
ethical standards so that audit reports should be prepared in a standard way for the issuer.
 Appealing to prosecuting and protecting its entity in the US by dint of stock exchange
Commission.
 Hiring staff, accountants, attorneys, and other agents in accordance with the PCAOB's
mission.
 Accumulating, evaluating, and providing the board with accounting collaborative
remuneration.
PCAOB under SOX exercises power on public accounting firms and plays a great role in the
United States.

Conclusion:
Enron, Tyco, and other accounting scandals led to introduce the Sarbanes Oxley Act. After the
introduction of the Sarbanes Oxley Act, investors have strengthened their confidence. This Act
introduced some provisions that help to maintain rules and regulations of the company’s. The
PCAOB has reduced audit risk by guiding auditors to examine the audit procedures of the
company. SOX has also strengthened the internal control systems. The impact of SOX on the
corporate sector is immense. It has created greater transparency in the corporate sector. Although
the compliance cost of SOX is high, it helps to maintain proper corporate guidance and reduces
fraud. SEC should also look into the matter of reducing the compliance cost of this act. If the
compliance cost reduces, companies will be encouraged to adopt this law. The report has
described ins and outs of the Sarbanes Oxley Act and PCAOB.