Pcoab Reporting Essay

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A Practical Guide To The New PCAOB Reporting Requirements The PCAOB is a nonprofit corporation established by Congress, created by the Sarbanes Oxley act of 2002 to oversee the audits of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, accurate and independent audit reports. The PCAOB also oversees the audits of broker-dealers, including compliance reports filed pursuant to federal securities laws, to promote investor protection. During this case study I will address the following topics: How does the reporting requirement of the PCAOB reduce the chance of financial fraud? Illustrate the responsibilities of an auditing firm to detect fraud during the audit process. I will recommend other alternatives to the PCAOB. Lastly, prepare a sample timeline for PCAOB reporting. On August 3, 2010 the Public Company Accounting Oversight Board (“PCAOB”) proposed a new standard designed to strengthen requirements for audit confirmation; that is direct auditor communication with third parties about particular items affecting the audit client’s financial statements. Recognizing that audit evidence from third parties often is more reliable than evidence generated internally or provided by a client, the PCAOB proposed the new standard to reduce the risk of material misstatement due to fraud or error and resulting in improper revenue recognition. Subject to public comment and Securities and Exchange Commission approval, the new standard would replace existing confirmation requirements for audits for fiscal years ending on or after Dec. 15, 2011. How PCAOB Reporting Requirements Reduces Fraud How the reporting requirements of the PCAOB reduce the chance of financial fraud: PCAOB necessitate senior financial managers to enforce a code of conduct (Advisory Report, 2003). The purpose of the code of

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