| May
28, 2003 -- With the passage of the Act, the Public
Company Accounting Oversight Board (PCAOB) was created and
given the right to regulate the auditors of public companies
and to set auditing standards.
On
April 16, 2003
, the PCAOB assumed responsibility for the audit standard
setting processes for public companies.
The PCAOB has accepted existing current auditing
standards and is in the process of forming an advisory board
to draft new audit standards for public companies.
Prior to this decision, the American Institute of
Certified Public Accountants (AICPA) was responsible for the
oversight of public (as well as private) audit standard
processes through the Audit Standards Board (ASB).
The ASB was responsible for setting auditing
standards.
As
a result of the above, among other considerations, the key
issue is whether there will be different auditing standards
for public companies versus private companies.
This issue remains open as the PCAOB begins to set
new auditing standards for public companies.
Currently, the ASB will continue to set auditing
standards for private companies.
Accounting
Standards
The
Act authorizes the Security and Exchange Commission (SEC) to
recognize an independent, private accounting standard
setting entity.
The
SEC affirmed that the Financial Accounting Standards Board (FASB)
meets the required standards for recognition as the
accounting standard setting group.
The FASB has been and will continue to be independent
of the AICPA.
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