What Is the PCAOB?
The Public Company Accounting Oversight Board (PCAOB) is a non-profit organization that regulates auditors of publicly traded companies. The purpose of PCAOB is to minimize audit risk.
The Public Company Accounting Oversight Board (PCAOB) was established with the passage of the Sarbanes-Oxley Act of 2002. The act was passed in response to various accounting scandals of the late 1990s. The board's aim is to protect investors and other stakeholders of public companies by ensuring that the auditor of a company's financial statements has followed a set of strict guidelines. PCAOB is overseen by the Securities and Exchange Commission.
Firms that audit public companies, brokers and dealers must register with PCAOB. Registered firms are subject to inspection of the audits they have performed. PCAOB also is involved in setting standards aimed at improving the reliability of audits and may also enforce standards by imposing penalties for infractions. In 2016, PCAOB settled 54 disciplinary orders and levied one $8 million fine.