The Public Company Accounting Oversight Board (PCAOB) is a private-sector, nonprofit corporation created by the Sarbanes–Oxley Act of 2002. It’s goal is to to oversee the audits of public companies and other issuers in order to protect the interests of investors and further the public interest. All of these coincide to the preparation of informative, accurate and independent audit reports. Since 2010, the PCAOB also oversees the audits of broker-dealers. This include compliance reports filed pursuant to federal securities laws in order to promote investor protection. Any rules and standards set by the PCAOB must be approved by the U.S. Securities and Exchange Commission (SEC).
The PCAOB has the authority to:
- Register public accounting firms that prepare audit reports for issuers and broker-dealers.
- Set auditing, quality control, ethics, independence and other standards that relate to the preparation of audit reports of issuers.
- Conduct inspections of PCAOB-registered public accounting firms;
- Conduct investigations and disciplinary proceedings concerning, and impose appropriate sanctions where justified upon, registered public accounting firms and associated persons of such firms.
- Perform such other duties or functions as the Board determines are necessary or appropriate to promote high professional standards among, and improve the quality of audit services offered by, registered public accounting firms and their employees;
- sue and be sued, complain and defend, in its corporate name and through its own counsel, with the approval of the SEC, in any Federal, State or other court;
- conduct its operations, maintain offices, and exercise all of its rights and powers in any part of the United States, without regard to any qualification, licensing or other provision of State or [municipal] law;
- hire staff, accountants, attorneys and other agents as may be necessary or appropriate to the PCAOB’s mission (with salaries set at a level comparable to private sector self-regulatory, accounting, technical, supervisory, or other staff or management positions, as set out by the Sarbanes-Oxley Act to attract the highly skilled and experienced professionals needed to oversee global accounting firms);
- allocate, assess, and collect accounting support fees that fund the Board; and
- enter into contracts, execute instruments, incur liabilities, and do any and all other acts and things necessary, appropriate, or incidental to the conduct of its operations and the exercise of its powers under the Sarbanes-Oxley Act.