Nineteen Auditing Entities Face Discipline Related Proceedings from PCAOB
The PCAOB is at present conducting discipline related proceedings against nineteen auditing entities and thinking of putting an end to the registrations of as many as eight hundred and seventy companies that have failed to audit public entities or dealers-broker.
Addressing the University of Tennessee Corporate Governance Center, Jeanette Franzel, a Public Company Accounting Oversight Board member held discussions regarding the existing issues and trends as far as pubic company auditing is concerned. Franzel pointed out that at present close to two thousand four hundred companies have done their registrations with the Public Company Accounting Oversight Board out of which around fifteen hundred firms are from United States and around nine hundred firms are non United States spread across in eighty four countries. Out of the eight hundred and fifty three companies that have done their registrations with the PCAOB reported that they conduct auditing of issuers and also play a significant role in auditing of issuers. In addition to this, another five hundred and eighteen companies reported that they audit dealers and brokers but do not audit issuers. A total of one thousand three hundred and seventy one firms reported that at present they audit broker-dealers or issuers.
On the other hand, another eight hundred and seventy entities, including around five hundred and twenty five foreign companies and three hundred and forty five United States companies reported that they do not conduct auditing of dealer-brokers or issuers and neither plays any role in such auditing.
Franzel also stated that a couple of firms had done their registrations with a desire to acquire public entity or dealer-broker audit customers. It makes sense for the board to think whether continuing registration would be appropriate for an entity having no intention of offering services or not. Franzel also clarified that the board may very soon think of ways to address entities that fall in this particular category.
While Franzel clarified that nineteen auditing entities are facing discipline related proceedings, as per the Sarbanes-Oxley Act the PCAOB cannot reveal anything regarding discipline related proceedings unless the entire process of hearing, charging, initial decisions as well as appeal is over.