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The role of the Public Company Accounting and Oversight Board (PCAOB)

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The role of the Public Company Accounting and Oversight Board (PCAOB)
PCAOB is an entity which was formed to play an oversight role over auditors of all public
companies, and it is not profit-oriented. This was aimed at protecting vulnerable investors from
unscrupulous and scandalous deals by the management of the public companies. Carmichael and
Lynford (34) assert that PCAOB does this role through the provision of comprehensive and
timely audit reports to investors and the public. The Securities and Exchange Commission (SEC)
do the role of overseeing the board in order to ensure transparency and accountability of all
information relayed by the board to the public domain. The roles of the board include registering
of the public accounting firms and ensuring companies comply with the Sarbanes-Oxley Act,
which created it in 2002 (Stimson, 45). In addition, the board plays a role in the establishment of
auditing, autonomy, ethical standards, control of quality of service delivery, conducting of
inspections, implementation of disciplinary obligations, and carrying out of investigations on
frauds and misappropriation of registered public company funds.
The board IS charged with the mandate of hiring and firing of members of the board,
approving the budget of the board, and the reviewing of the board’s inspection reports. PCAOB
ensures that there is compliance to the Sarbanes-Oxley Act, in order to have total quality
management in the public accounting sector. According to Bruno, Sabrina, and Eugenio (29), the
enquiries and investigations the board carries out aid in the establishment of variances and faults
in the checks and balance systems for rectification. This leads to improvement in the

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accountability of the shareholders’ capital net worth in the concerned companies. This also
serves as a measure for attracting of investors from all sectors to invest in the companies the
PCAOB approves. The board instills confidence in the public sector because its role as an
overseer of the operations of the public companies deters the companies’ personnel from
indulging in malpractices, which compromise the public sector quality standards.

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Works Cited
Carmichael, D R, and Lynford Graham. Accountants' Handbook, Financial Accounting and
General Topics. Hoboken: John Wiley & Sons, 2012.
Stimson, William A. The Role of Sarbanes-Oxley and Iso 9001 in Corporate Management: A
Plan for Integration of Governance and Operations. Jefferson, N.C: McFarland & Co,
2012. Print.
Bruno, Sabrina, and Eugenio Ruggiero. Public Companies and the Role of
Shareholders: National Models towards Global Integration. Alphen aan den Rijn, The
Netherlands: Kluwer Law International, 2011. Print.

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