Historical frame
- Kind
- organization
- Period
- Created 2002
- Jurisdiction
- United States
The board adds external oversight of audit firms through registration, standards, inspections, and enforcement.
Questions to carry forward
- How is inspecting an audit firm different from auditing a company's statements?
- Does audit oversight transfer responsibility for the statements away from management?
Claim disciplineEvidence boundaries
- The PCAOB does not audit issuers itself.
- Its jurisdiction is not identical to the scope of all financial-statement audits.
The Public Company Accounting Oversight Board (PCAOB) was created by the Sarbanes-Oxley Act of 2002. It oversees audits of public companies and SEC-registered brokers and dealers within its scope. SEC means Securities and Exchange Commission, which oversees the PCAOB.
The PCAOB registers audit firms, sets standards, inspects firms' work, and can take enforcement action. It does not perform each company's audit. An audit firm examines the company's reporting under applicable standards; the PCAOB examines whether covered audit work meets its requirements.
These roles do not transfer responsibility for the financial statements away from company management. They also do not guarantee that every reporting or audit failure will be prevented.