Public Company Accounting Oversight Board (PCAOB)
What is the PCAOB
The PCAOB is a non-profit based organization and a private entity. It was created through the Sarbanes–Oxley Act 2000, that was mainly a US federal law. The purpose of this board is to protect the interest of various investors involved. This also serves the purpose of further interest of preparing audit reports that are fair and just. Although the PCAOB is a privately governing body, it still has a pool of government like regulatory functions that are almost same as the regulatory procedures of the private board.
Organizational Structure of the PCAOB
The PCAOB has 5 members in total. There is a chairman, appointed by the SEC or the US Securities Exchange Commission. 2 of the members of the committee must be certified public accountants. The annual salary of the chairman is close to $670,000 a year. If the chairman is one of the 2 members, they do not hold the right to practice CPA for the next 5 years in term. Other board members have a salary of about close to $550,000. The annual budget of the board is around $180 million, that comes through SEC approval. Headquartered in the capital of the US, the Washington D.C., the board has around 600 members.
Powers of the PCAOB
The PCAOB has the following powers including:
- Register accounting firms who make audit reports
- Setting up quality control, auditing, and ethical practices that help in preparation of audit reports
- Inspecting registered accounting firms regularly
- Conducting investigations and disciplinary hearings to award appropriate actions to registered public accounting firms.
- Perform various duties sanctioned by the board, including promotion of high standards within the committee and improving the quality of the audit process conducted.
- Sue or get sued, defend or complain through the name of the corporation and with the approval of SEC in any court.
- Hire necessary staff, and accountants or even other agents to perform extra duties as such.
- Assess and allocate supporting fees for accounting that funds the board.
- Entering various contractual agreements.
- Incur various liabilities when necessary and appropriate.
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