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How the Public Company Accounting Oversight Board Differs from the Independence Standards Board”

In: Business and Management

Submitted By srupert
Words 1284
Pages 6
With the complexity of accounting today there is a need for someone to oversee the auditors and the publicly help companies. The auditors must prove their independence when attesting to the financial statements of publicly held companies. The public companies must be honest and open when they file their financial statements. In recent years there have been auditors who were bias towards some companies and also companies have not been disclosing all the facts about their financial position. These problems are the reasons why there is a need for an overseeing, unbiased board of professionals. The board can help stop most of the problems with auditing and filing of financial statements. The board can do so by establishing and enforcing rules and standards for public companies and auditors. The two recent boards that have attempted to solve the problems are the Independence Standards Board and the Public Company Accounting Oversight Board. The Independence Standards Board was established in May of 1997 as a result of discussions between the American Institute of Certified Public Accountants and the U.S. Securities and Exchange Commission. The biggest issue was the integrity of the financial statements of public companies. In order to have confidence and credibility of the financial statements the auditors must be independent of the public companies. “The operating policies of the Independence Standards Board are designed to permit timely, thorough, and open study of issue involving auditor independence and to encourage broad public participation in the process of establishing and improving independence standards.” With the establishment of Independence Standards Board the auditors of public companies have increased the confidence of the investors who read the financial statements. “In 1997, after several months of discussions with representatives of the accounting...

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