Question

Since the creation of the PCAOB in 2003, accounting firms that wish to audit public companies must be registered with the PCAOB. Visit the PCAOB’s website (www.pcaobus.org) and browse the information.

Explain what is required for an accounting firm to be registered with the PCAOB.

Answer 1

All accounting firms that prepare audit reports on U.S. public companies must register with the Board. Registration is the basis for all of the Board's other authority such as requiring compliance with Board auditing standards and conducting inspections.

About PCAOB :-

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and the public interest by promoting informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers, including compliance reports filed pursuant to federal securities laws, to promote investor protection.

The five members of the PCAOB Board, including the chairman, are appointed to staggered five-year terms by the Securities and Exchange Commission, after consultation with the chair of the Board of Governors of the Federal Reserve System and the secretary of the Treasury. The SEC has oversight authority over the PCAOB, including the approval of the Board's rules, standards, and budget.

Mission, Vision & Values:-

Mission:-The PCAOB oversees the audits of public companies and SEC-registered brokers and dealers in order 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.

Values:- 1.Integrity-We adhere to the highest standards of ethical and professional conduct. We engage internally and externally in a manner that is consistent, honest, and fair. 2.Excellence-We pursue excellence in all we do. We are committed to further developing the many talents of our   people so that we can improve our oversight and operations. 3.Effectiveness-We manage our resources effectively and efficiently. We respond to a changing environment by implementing relevant, timely, and innovative solutions to achieve our mission. 4.Collaboration-We are dedicated to a culture of collaboration and inclusiveness, which we foster by encouraging openness, accessibility, trust, and respect. 5.Accountability-We depend on the diligence and dedication of our people to accomplish our mission and implement our vision.

The PCAOB has issued the following standards :- 1.Auditing Standards 2.Quality Control Standards 3.Attestation Standards. In addition it has issued Ethics and Independence Rules also.

The following is required for an accounting firm to be registered with the PCAOB:- Each public accounting firm that – (a) prepares or issues any audit report with respect to any issuer, broker, or dealer; or   (b) plays a substantial role in the preparation or furnishing of an audit report with respect to any issuer, broker, or dealer must be registered with the Board.

Note 1: As set forth in Section 106(a)(1) of the Act, registration with the Board pursuant to this Rule will not by itself provide a basis for subjecting a foreign public accounting firm to the jurisdiction of the U.S. federal or State courts, other than with respect to controversies between such firms and the Board.

Note 2: The issuance of a consent to include an audit report for a prior period by a public accounting firm, which does not currently have and does not expect to have an engagement with an issuer, broker, or dealer to prepare or issue, or to play a substantial role in the preparation or furnishing of an audit report with respect to any issuer, broker, or dealer will not by itself require a public accounting firm to register under Rule 2100.

Accounting firms must register with the PCAOB to prepare or issue an audit report for a public company or another issuer, or a broker-dealer, or to play certain roles in those audits.