PCAOB was established by “Sarbanex-Oxley Law” to deal with the financial scandals of 2001-2002
Congress had given the five-member PCAOB board, a not-for-profit corporation, broad regulatory authority over accounting firms that audit publicly traded companies.
SOX required among many reforms the SOX section 404 work, which required extensive work on the documentation and testing of ICOFR (Internal Controls Over Financial Reporting and Disclosures)
“The Supreme Court held that the Sarbanes-Oxley Act’s provisions making PCAOB Board members removable by the Securities and Exchange Commission (SEC) only for good cause were inconsistent with the Constitution’s separation of powers . . . The consequence of the Court’s decision is that PCAOB Board members will be removable by the SEC at will, rather than only for good cause.”
The importance of this SCOTUS ruling can not be underestimated, as the PCAOB could have potentially been dismantled, significantly affecting the independent oversight over companies and their auditors.
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Click HERE to read statement by PCAOB.
Click HERE to read 4th US Supreme Court update today.
Click HERE to see the SOX Law in its entirety.
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