Question

What is the role of the PCAOB, SEC, and AICPA in auditing?

Answer 1

PCAOB stands for Public Company Accounting Oversight Board. It is a non profit organisation that regulates auditors of publicly traded companies. The purpose of PCAOB is to minimize audit risk.

Its role includes:

I) to oversee the audits of public companies in order to protect investors and the public interest by promoting informative, accurate, and independent audit reports.

2) It oversees the audit of brokers and dealers, including compliance reports filed pursuant to federal securities laws, to promote investor protection.

3) It sets standards, do inspections, enforcement and outreach programs.

4) It cooperates closely with the Securities and Exchange Commission not only because the SEC oversees the pCAOB's activities, but because the PCAOB and the SEC share the mutual objective of investor protection.

5) It explores ways to improve its audit requirements and their implementation by audit firms, while preserving the intended benefits.

SEC stands for Securities and Exchange Commission. It is a regulatory body and federal agency responsible for the Oversight and enforcement of laws pertaining to the securities industry.

Its role includes :

I) It works to oversee corporate takeovers and to protect investors.

2) It aims to protect creditors and customers.

3) It offers information to investors and maintain efficient and transparent markets.

4) It aims to enforce better control over financial establishments.

5) It oversees the involvement and operation of organisation and individual investors.

6) It monitors securities companies, self regulatory organisations and the stock markets.

7) It aims to establish more robust regulations for the credit bureaus and over the counter derivatives.

AICPA stands for American Institute of Certified Public Accountants. It is rhe national non-profit professional organisation of certified public accountants in United States.

Its role includes:

I) to create and grade the certified public accountant examination.

2) It helps in establishing professional standards and disciplines members who are accused of misconduct while in active professional practice.

3) It helps in recruiting and educating prospective members.

4) It is responsible for certification and licensing licensing of new members.

5) It is involved in various public interest programs including feed the pig campaign; 360 degrees of financial literacy.