What is Public Company Accounting Oversight Board (PCAOB)?
In short
The Public Company Accounting Oversight Board (PCAOB), created by the Sarbanes-Oxley Act and overseen by the Securities and Exchange Commission, sets auditing, quality control, ethics and independence standards for audits of public companies and broker-dealers.
Key takeaways
- Audit firms must register with it to audit public companies.
- It inspects registered firms and can impose sanctions.
- Audits of private companies follow the American Institute of Certified Public Accountants' standards instead.
Where it's tested
AUD: Professional Ethics & Independence — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An audit senior on the engagement team owns 10 shares of the audit client's common stock, worth approximately $300. What is the effect on independence?