Two PCAOB releases on audit firm quality controls
23 Mar 2006
The US Public Company Accounting Oversight Board has issued two Releases concerning the Board's implementation of a provision of the Sarbanes-Oxley Act of 2002 that gives registered accounting firms an incentive to address quality control criticisms in Board inspection reports within 12 months after the Board issues the reports.
The Act provides that "no portions of the inspection report that deal with criticisms of or potential defects in the quality control systems of the firm under inspection shall be made public if those criticisms or defects are addressed by the firm, to the satisfaction of the Board, not later than 12 months after the date of the inspection report."
- In the (PDF 1,028k), the Board provides information about its process for determining whether a registered accounting firm has satisfactorily addressed quality control criticisms in an inspection report.
- In the (PDF 854k), the Board describes observations about efforts undertaken by the four largest US accounting firms to address quality control concerns identified during the Board's initial, limited inspections of those firms.