| This new
law establishes a Public Company Accounting Oversight Board
of five full-time, financially literate members. Two members
must be CPAs, but the chair cannot be a CPA unless that
individual has been out of public practice for at least
five years. Public companies and accounting firms will be
assessed fees that will fund the Public Oversight Board
as well as the Financial Accounting Standards Board.
Accounting firms with SEC practices must register with the
new board, which will:
- conduct inspections of these firms;
- establish standard rules on auditing, ethics, independence
and quality control;
- conduct investigations and disciplinary procedures as
appropriate.
Auditing firms of SEC registered clients can no longer provide
to these clients the following services: internal audit
outsourcing, actuarial services, information technology
installations, and business valuations, among others.
Tax services are still permitted with the permission of
the SEC registered company’s audit committee.
The leading members of the audit team must be rotated at
least every five years.
Membership and activities of audit committee members are
being restricted and their responsibilities and powers are
being expanded.
If you have questions on Sarbanes-Oxley, please call Mike
Byrnes, 215-940-7801.
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