12.10 Creation of the PCAOB

The Public Company Accounting Oversight Board (PCAOB)A private-sector, nonprofit corporation created by Sarbanes-Oxley to oversee accounting professionals who provide independent audit reports for publicly traded companies. is a private-sector, nonprofit corporation created by Sarbanes-Oxley to oversee accounting professionals who provide independent audit reports for publicly traded companies. Its responsibilities include

• registering public accounting firms;
• establishing auditing, quality control, ethics, independence, and other standards relating to public company audits;
• conducting inspections, investigations, and disciplinary proceedings of registered accounting firms;
• enforcing compliance with Sarbanes-Oxley.

When Congress created the PCAOB, it gave the SEC the authority to oversee the PCAOB’s operations, to appoint or remove members, to approve the PCAOB’s budget and rules, and to entertain appeals of PCAOB inspection reports and disciplinary actions.