The Public Company Accounting Oversight Board (PCAOB) has proposed new standards designed to protect investors by strengthening requirements for audit confirmations. They will provide oversight of auditors of public companies in preparation of a more informative, accurate, fair, and independent audited financial statements. The purpose of this paper is to write a 4-5 page paper in which to 1) Justify how the reporting requirements of the PCAOB reduce the chance of financial fraud; 2) Illustrate the responsibilities of an auditing firm to detect fraud during the audit process; 3) Recommend alternatives to the PCAOB; and 4) Prepare a sample timeline for PCAOB reporting.
Keywords: fraud, auditor, oversight, financial, protect, internal control, standards
1. Justify how the reporting requirements of the PCAOB reduce the chance of financial fraud. Basically, the goal of the Public Company Accounting Oversight Board is to improve quality of audited financial statements, reduce the risk of auditing failures, and increase public trust in financial reporting processes and of the auditing profession. In order for this to happen PCAOB must refocus and remind auditors of the standards required of them regarding fraud and for them to be diligent about their responsibilities relating to fraud. The purpose of auditing a financial statement is to detect material misstatements and false or missing information caused by fraud.
The PCAOB reporting requirements place a lot of emphasis on disclosure in financial reporting however the board provides guidance and information that are relevant which should be disclosed within the financial statements. PCAOB also dictates to management and to the auditor their roles and responsibilities in financial reporting. PCAOB requires these standards and duties to be followed reinforces the accounting professionals to be able to reduce fraud in financial reporting at the same time ensuring investors receive accurate financial...