Securities and Exchange Commission member Hester Peirce in a speech said that it may serve the public better if the PCAOB were eliminated and its functions incorporated into the commission—an idea which had been debated from time to time in the past but never became a reality.
In Peirce’s view, the current construct is flawed. The PCAOB develops standards that auditors of public company financial statements must follow. The board also has audit inspection and enforcement authorities. But because auditors function as gatekeepers of financial reporting in capital markets, the PCAOB’s functions are carried out under the auspices of the SEC. This audit regulatory framework was established by the Sarbanes-Oxley Act of 2002.
‘Enforcement 40’ for 2020
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