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Whether you work for a major business, own a business or have an interest in accounting, you may want to look at the functions of the PCAOB.
The PCAOB is the Public Company Accounting Oversight Board. Founded in 2002, the PCAOB investigates claims made by others and performs regular audits on all public accounting companies to ensure that those companies follow the standards and regulations put in place by the United States Securities and Exchange Commission. Its functions go beyond those audits too.
Performing Audits
Performing audits on public companies is one of the key things that the PCAOB does. A public company is one that sells stocks or shares in the company to others via the stock exchange. Federal laws do not require that public companies share any information regarding finances except in legal matters. The PCAOB follows the U.S. Securities and Exchange Commission standards in regards to how it audits those companies and with the information that it shares following its investigation.
Related: What is an External Auditor?
Registering Companies
PCAOB now offers accounting companies the right to register on its website and with its organization. Though it does charge an application fee, this fee changes based on the number of clients the company had in the previous year. Once an accounting finishes the registration process, it can apply to perform audits for the PCAOB. Registration also provides members with other benefits, including access to exclusive online content, a global network of accounting firms and publications and data compiled by the organization. The PCAOB also offers a career center that helps accountants find work with firms around the world. It also requires registration of all accounting firms facing an investigation.
Improving the Auditing Process
The auditing process is extremely complex and often requires that companies hand over a large amount of information before the process even starts. One goal of the PCAOB is that it hopes to improve this process and make the process go faster and more smoothly. Accountants have full access to online resources that show them what steps they need to take when doing an audit, how they can keep track of their research and data and how to put that information together in a valuable report.
Enforcing Disciplinary Actions
After conducting an audit, the PCAOB may find that the public company followed all standards and regulations, but it may also find that the company violated laws. Companies have the right to appeal that decision or accept the decision. PCAOB will then help determine the disciplinary actions to take and ensure that the company understands those actions. Many public companies found guilty of violating laws face steep fines and financial penalties from the government. In some cases, one or more employees of that company may face jail time. The public can view reports of companies that violated laws on the PCAOB website.
Accepting Referrals from Others
The audits that PCAOB performs comes from referrals and tips submitted by others. When an individual visits the website, he or she can lodge a complaint. They can file a complaint against an individual working for an accounting firm or for the firm in general. PCAOB recommends that the person filing the complaint include as much information as possible, including any legal or ethical violations made and the date or dates of the incident(s). The organization will review that complaint and decide what to do next as quickly as possible.
The Public Company Accounting Oversight Board is an organization devoted to ensuring the accounting standards and principles used by firms across the country. Some of the functions of the PCAOB including accepting complaints and auditing accounting firms.