Question

According to the article "PCAOB to work with Austrian audit regular" by Michael Cohn, editor-in-chief of Accounting today.com

(1) What is the importance of PCAOB.

(2) What relevance does the article highlight on the authority of the of PCAOB. Explain.

Answer 1

1) Importance of PCAOB - Its job is to protect the interests of investors in the preparation of informative, accurate and independent audit report" Basically, its job is to ensure that audits are conducted properly by independent auditors.

The PCAOB also oversees audits of broker-dealers, compliance reports filed under federal securities laws, to promote investor protection.

Further the duties of the Board include:

• Registering public accounting firms that prepare audit reports for public companies and broker-dealers, including those that are listed on U.S. exchanges.
• To establish standards related to the profession—eg. auditing, quality control, ethics, independence and other standards.
• Conducting inspections of audits by registered firms.
• Investigates, conducts disciplinary proceedings, and imposing sanctions on auditors and audit firms, as required.

2. Relevance of "PCAOB to work with Austrian audit regular"

It provide framework for conducting joint inspections in overseeing of audit firms subject to the regulatory jurisdictions of both organizations. It also allows for the exchange of confidential information.

By this now PCAOB has cooperative agreements with all16 audit regulators in Europe.

Under the Sarbanes-Oxley (SOX) Act, the PCAOB is required to oversee and inspect all accounting firms that regularly perform audits of public companies whose securities are traded in U.S. markets. Nearly 900 audit firms currently registered with the PCAOB are located outside the United States in 84 jurisdictions. Currently, six PCAOB-registered firms are located in Austria.

By this agreement can jointly oversee audit conductied by these 6 firms also.