Question

Please explain in detail How does PCAOB law affect the Auditors

Answer 1

Under the Saebanes-Oxley Act of 2002, Public Company Accounting Oversight Boaed is established to oversee the audit of public companies. The objective of the board is to protect the investors’ interests and ensure accurate and independent audit reports to further public interest

Duties of the board are:

• Register public accounting firms
• Establish or adopt auditing standards
• Inspect registered accounting firms
• Conduct inspection and disciplinary proceedings against public accounting firms
• Enforce compliance with this Act

Auditors need to follow the auditing standards of PCAOB.

Auditing standards are:

• General Principles and Responsibilities(Independence, Proficiency, Due Professional Care)
• General Concepts(Audit Risks, audit evidence, Quality Standards)
• General Activities(Audit documentation, Supervision, Quality Review)
• Auditor communication
• Audit Procedure
• Auditing Internal Control over Financial Reporting
• Auditor Reporting

Auditors need to follow the standards and their work is under oversight of PCAOB.

Disciplinary actions can be taken against auditors by PCAOB if required.