Question

why is the pcaob relevant to the business community? explain in 200 words

Why are they relevant to the business community, meaning, what effect they have on the business community .

Answer 1

Solution:-

The PCAOB is the regulator with responsibility for ensuring that auditors of public companies and brokers-dealers are faithfully carrying out their duties on behalf of investors.

Although the seeds of reform were planted long before,^[2] it was the audit failures at Enron and WorldCom, and the phony earnings, accounting gimmickry and restatements at numerous other companies in the late 1990s and early 2000s—which cost investors over $7 trillion in wealth^[3]—that led to the passage of the Sarbanes-Oxley Act in 2002, the creation of the PCAOB, and the end of the era of self-regulation by the audit profession in the United States.

The PCAOB's role in investor protection is clearly laid out in the Act. Its first words are "[t]o protect investors by improving the accuracy and reliability of corporate disclosures." Section 101 of the Act states that the PCAOB oversees the audits of public companies "in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports." (Emphasis added.)

A core part of the PCAOB's mission is investor protection. That is why our work should be important to you and why I would encourage the ICGN to actively engage in the Board's oversight and regulatory activities.

In conclusion, the PCAOB protects investors by holding auditors accountable to the highest standards of independence, objectivity and professional skepticism. But, while audit quality has improved, more needs to be done.

The PCAOB continues to focus on addressing threats to auditor independence from the firm business model. But your input and active involvement relating to all the Board's activities is extremely important to us. Otherwise, as George Santayana, the renowned Spanish philosopher, once proclaimed "[t]hose who cannot remember the past are condemned to repeat it."