The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Category Archives: PCAOB

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Supreme Court Rules PCAOB Removal Provisions Unconstitutional, Upholds SOX

Posted in PCAOB, SOX (Generally)
In a June 28, 2010 decision (here), the Supreme Court issued its opinion in Free Enterprise Fund v. Public Company Accounting Oversight Board case. This case had been widely followed because the petitioners challenged the constitutionality of the Sarbanes-Oxley Act and of the Public Company Accounting Oversight Board (PCAOB).   The petitioners prevailed before the … Continue Reading

PCAOB Reports Significant “Triennial Firm” Audit Concerns

Posted in PCAOB
Under Section 104(b) of the Sarbanes-Oxley Act, the Public Company Accounting Oversight Board (PCAOB) is required to inspect audit firms that regularly provide audit reports for fewer than 100 public companies “not less frequently than once every 3 years.” On October 22, 2007, the PCAOB released a Report regarding its inspections of these so-called “triennial … Continue Reading

PCAOB Says Auditors Should Sharpen Fraud Detection

Posted in PCAOB
Based on the accumulated observations of its inspections of public company audits, the Public Company Accounting Oversight Board is concerned that auditors may not be doing all they could (or even all that is required) to detect the possibility of fraud at the companies they are auditing. In a January 22, 2007 release entitled “Observations … Continue Reading

Looking at Auditor Liability Caps

Posted in Accountant Liability, International D & O, Paulson Committee, PCAOB, Regulatory Reform
When the Committee on Capital Markets Regulation (popularly known as the Paulson Committee) in its Interim Report (here) recommended "setting a cap on auditor liability," the Committee relied for support on the steps in that direction that have been taken by the European Commission. In its latest effort along those lines, the European Commission on … Continue Reading

The PCAOB’s Audit Firm Inspection Reports

Posted in PCAOB
On January 11, 2007, the Public Company Accounting Oversight Board (PCAOB) released its annual inspection reports of Ernst & Young LLP and KPMG LLP. The reports can be found here and here. The PCAOB is required by law to annually inspect each accounting firm that audits more than 100 public companies. The agency’s reports on … Continue Reading

Is SOX Unconstitutional?

Posted in PCAOB, SOX (Generally)
On Thursday December 21, 2006, the parties to a case pending in the United States District Court for the District of Columbia will argue whether the Sarbanes-Oxley Act’s provisions establishing the Public Company Accounting Oversight Board (PCAOB) are unconstitutional. Although the case focuses on only a narrow part of the Act, it has the potential … Continue Reading