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Pcaob Reporting

In: Business and Management

Submitted By sanchez1sykes
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Case Study 2: A Practical Guide to the New PCAOB Reporting Requirements

Forensic Accounting: ACC-571
January 28, 2012

A Practical Guide to the New PCAOB Reporting Requirements Created by the Sarbanes-Oxley Act of 2002, the Public Company Accounting Oversight Board or PCAOB requires auditors of U.S. public companies be subject to external and independent oversight. Congress established the PCAOB in order to protect investors and the public interest by promoting accurate, informative, and independent audit reports. The PCAOB aims to improve audit quality, reduce the risks of auditing failures in the U.S. public securities market and promote public trust in both the financial reporting process and auditing profession. (PCAOB, 2012). During this case study I will justify how the reporting requirements of the PCAOB reduce the chance of financial fraud, illustrate the responsibilities of an auditing firm to detect fraud during the audit process, recommend alternatives to the PCAOB, and lastly prepare a sample timeline for PCAOB reporting.
How the reporting requirements of the PCAOB reduce the chance of financial fraud: PCAOB necessitate senior financial managers to enforce a code of conduct (Advisory Report, 2003). The purpose of the code of conduct is to encourage honesty and ethical conduct, compliance to relevant regulations, and also promote full, accurate and timely disclosure in financial reports. As a result, the PCAOB reduces chances of financial fraud by ensuring management practices proper conduct in financial reporting and are also required to certify that financial reports do not have omissions and misstatements. The PCAOB ensures that there is no fraud in audit reports by imposing requirements to promote auditor’s independence. The Sarbanes Oxley Act requires an auditor to ensure accuracy of financial reports and also effectiveness of internal...

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