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Sarbanes-Oxley News & Developments
PCAOB Can Not Bark, Suggests Crafty Way To BitePCAOB urges managers to put the squeeze on accounting firms.
> > Under Sarbanes-Oxley (SOX), the Public Company Accounting Oversight Board (PCAOB) cannot publicly reveal problems it uncovers at an accounting firm if the firm fixes the problems within 12 months. This is not a popular feature among investors who want to know about sloppy auditing practices or lack of independence from clients.
Two PCAOB members have suggested a way to circumvent those restrictions. Kayla J.Gillan and Willis D.Gradison Jr. are urging corporate directors to force accounting firms to turn over their inspection reports in order to win or keep the companies business.
The board added that special emergency teams can conduct quick investigations in the event of an audit blowup or corporate scandal. Under the proposals, auditing firms and accountsnts who are registered with the oversight board could be punished for breaking securities laws, failing to reasonably supervise other accountants, or refusing to cooperate with an investigation.
Disciplinary proceedings would be private, however, unless both sides consented to opening the proceedings to the public. Auditors and their firms could be suspended or barred from auditing public companies, hit with monetary penalties, forced to submit to independent monitoring, or required to undergo more training.
The PCAOB also said it is currently in discussions with the European Union and with Japanese and Canadian officials, all of whom oppose many of the attempts by the board to extend their regulatory reach overseas, according to Reuters.
Source: CFO
Published:2003-08-22
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