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Sarbanes-Oxley News & Developments
Audit Board Aims To Set StandardsThe American Institute of Certified Public Accounts, the industrys influential trade and lobbying group, could be stripped of one of its chief duties: setting standards for accountants.
> > The four-member Public Company Accounting Oversight Board unanimously voted Wednesday, April 16,2003, to establish quality control and ethics to be followed by accounting firms when preparing the financial statements of public companies.
The rule is subject to final approval by the SEC.
"Auditing standards are broken," said Charles Niemeier, the accounting boards acting chairman, at the boards meeting wednesday. He suggested that stronger internal controls at accounting firms might have prevented the financial fraud that has surfaced at companies in recent years.
The boards action demonstrates it is committed to using the fullest extent of its powers to regulate accountants. Congress had granted the accounting board the right to designate any professional group of accountants as the authority to propose new standards.
The accounting board is centerpiece of the Sarbanes-Oxley Act, the sweeping legislation enacted last year aimed at preventing corporate scandals. The board has broad powers to inspect and discipline accounting firms that audit public companies whose stocks are listed on U.S. stock exchanges.
In other action Wednesday, the board unanimously approved its rules to collect fees from public companies with a market capitalization greater than $25 million. The fees will be used to fund the boards operations. The biggest U.S. companies, based on market capitalization, will likely pay the board an annual fee of $1 million.
The board alsp proposed its own code of ethics to avoid perceived conflicts of interest. The comment period will end May 9.
Source: CBS MarketWatch article by Matt Andrejczak April 16, 2003
Published:2003-04-17
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