Public Company Accounting Oversight Board (PCAOB) - Will it Protect Inv

Public Company Accounting Oversight game plank ordain it Protect Investors?The Public Company Accounting Oversight Board (PCAOB) was created by Sarbanes-Oxley Act of 2002. This board was created to oversee the inspect of public companies, subject to the securities laws, in order to protect the interests of investors (15 USC 7201, 2002). It was created in wake of the recent financial scandals of Enron, WorldCom, and global Crossing to name a few. This Act established by Congress is to create an oversight board, so that such scandals leave alone never occur again. Will this oversight board work and will its work restore public confidence and encourage individuals to invest in the contain market again?The PCAOB is non a tax-payer funded agency. It is supported by over 8800 companies and mutual funds that benefit from independent audits (Epstein). The PCAOB principle duties are1.Register public chronicle firms that prepare audits.2. prepare and/or adopt standards relating to the preparation of audit reports for issuers.3.Conduct inspections of registered public accounting firms.4.Conduct investigations and disciplinary proceedings.5.Promote high professional standards and improve the quality of audit services offered by registered public accounting firms.6.Enforce compliance with the Sarbanes-Oxley act (15 USC 7201, 2002).Before the establishment of Sarbanes-Oxley and the PCAOB, there was no oversight board. Public accounting firms would actualize peer reviews to verify that audits were being performed with due diligence. However, these reviews were not high priority, thus uncovering errors/negligence made by the public accounting firms by peers were rarely discovered. It was only after the massive failures of Enron and WorldCom that this gross negligence by the public accounting firm performing the audit came to light. It was clear that an independent review board was necessary to ensure due diligence is being followed when a public accounting firm audit s a corporation. The PCAOB will examine yearly those public accounting firms with more than 100 publicly-traded audit clients. All others will be examined every three years. Any violations of Sarbanes-Oxley or SEC and the PCAOB may fine or unfit firms from public accounting audits (Epstein). The power to fine or disqualify a public accounting firm from ... ...g profession.It is still too early to tell if the PCAOB will be effective or not. Only time will tell if the actions of the PCAOB and the public accounting firms will restore investor confidence to invest in the stock market, again.Works CitedAccountability in the Era of Global Markets. The Fletcher School. Feb. 2004 Tufts University. 16 May 2004.Calabro, Lori. New Attestation Standards for Internal Controls Put More Power in the transfer of Auditors. CFO Magazine. May 2004 Economist.com. Lexis-Nexis. Baker University.16 May 2004 .Epstein, Jonathan. Watchdog Says Accounting Firms Have Much to do to Restore Credibility. Buffal o News. 19 April 2004 Knight Ridder/Tribune caper News. Lexis-Nexis. Baker University. 16 May 2004 .Griggs, Linda L. Audits of Internal Control over Financial Reporting What do they Mean? Prentice Hall Law & Business Insights. 29 April 2004 Lexis-Nexis. Baker University. 16 May 2004 .Michaels, Adrian. Accountants Urged to take Moral Stand. Financial Times. 19 Dec. 2004Financial Time Limited. Lexis-Nexis. Baker University. 16 May 2004.Sarbanes-Oxley Act of 2002. Pub. L. 107-204. 30 July 2002. Stat. 116.745