Summary of recent PCAOB actions that impact an audit, its auditors and Research Paper

Summary of recent PCAOB actions that impact an audit, its auditors and its audit committee - Research Paper Example Moreover, the PCAOB oversees the registration of public accounting bodies responsible for auditing publicly traded companies, conducts disciplinary proceedings and investigations of registered firms, inspects the registered firms’ practices, and approves registered firms (Carmichael 6). Recently, The Public Company Accounting Oversight Board (PCAOB) has suggested new guidelines aimed at investors’ protection via strengthening prerequisites for audit substantiation. One of these guidelines includes inspections, which is an effort by PCAOB to promote high quality audit. Annual inspection oversees the improvement of quality audit. PCAOB requires any audit firm auditing a public company to be registered with PCAOB. Such a firm is inspected annually by the PCAOB if it audits 100 or more publicly traded companies or after every three years if it audits less than 100 public companies (Knapp 62). Results obtained after inspection help point out areas which require further practice, audit guidance, reminders training, or enhanced skills leading to better performance by audit professionals. A report is prepared after every inspection by the PCAOB and made available to public. Recently, the PCAOB added more responsibilities to the audit committee which include responsibility of overseeing the work of external auditors, compensation, and appointment (Carmichael 25). The committee is obliged by SOX to comprise of at least one person with financial expertise in order to facilitate its duties. With some expertise, the audit committee is in a better position to challenge financial statements, ascertain the appropriateness and sufficiency of internal controls, and, if need be, perform certain accounting procedures to safeguard interests of Shareholders. Companies that lack a financial expert as a member of the audit committee are required to disclose and give an explanation for this in the yearly proxy