| All Certified Public Accountant (CPA) firms, in the | | | | performance and issuance of audited financial |
| US and foreign, that provide audited financial | | | | statements and attest services; related matters |
| statements for public companies registered with | | | | involving public companies, and investigate and |
| the SEC (Securities and Exchange Commission) | | | | discipline any accounting firms and related |
| must be registered with the Public Company | | | | accountants who are in violation of specific laws |
| Accounting Oversight Board (PCAOB), sometimes | | | | or standards. All CPA firms are still required to |
| referred to as Peekaboo. The PCAOB is a | | | | have peer review of their auditing and accounting |
| private-sector, nonprofit corporation that was | | | | practice in order to satisfy the American Institute |
| created by the Sarbanes-Oxley Act of 2002 | | | | of Certified Public Accountants (AICPA) |
| which is under the jurisdiction of the SEC. The | | | | membership, federal regulatory (Generally |
| Sarbanes-Oxley Act and the creation of the | | | | Accepted Auditing Standards) and/or state |
| PCAOB were a result of the accounting fraud | | | | licensing requirements. |
| scandals of Enron and WorldCom. There are | | | | The PCAOB currently has pending a requirement |
| currently over 2,000 public firms registered with | | | | that all registered CPA firms submit an annual |
| the PCAOB, with more pending registration. A list | | | | report on Form 2, provided on the PCAOB |
| of current and pending registered firms can be | | | | website, by June 30th, except for those firms |
| found on the PCAOB website. | | | | that have been registered between April 1st and |
| Only Certified Public Accountants (CPA's) can | | | | June 30th of that year. Also they will be required |
| prepare audited financial statements on behalf of | | | | to pay an annual fee to the PCAOB by July 31st. |
| a business or non-profit organization. In order for | | | | As these requirements are still pending approval, |
| a non-certified accountant to become a CPA, the | | | | the annual report and fees are not required for |
| accountant needs to work for an accounting firm | | | | the 2009 calendar year deadlines. In these reports |
| for a few years, acquire five hundred hours of | | | | the registered CPA firms must provide various |
| auditing time, and pass a test from the American | | | | information for the year including: audited financial |
| Institute of Certified Public Accountants as well as | | | | statement reports issued during the year; |
| from their state. A CPA also must take 120 hours | | | | disciplinary history of any accountants that joined |
| of continuing education courses every three years | | | | the firm during the year; a break down of the |
| to maintain their license. | | | | fees for services provided to all clients during the |
| The purpose of the Public Company Accounting | | | | year, showing the percentage of the fees billed to |
| Oversight Board is to oversee auditors, | | | | public audit clients for audit services, other |
| (accounting firms, Certified Public Accountants | | | | accounting services, tax services, and non-audit |
| (CPA’s), accountants) of public companies in | | | | services. The PCAOB also requires registered CPA |
| order to protect the interests of investors and | | | | firms to submit special reports on Form 3 within |
| further the public interest in the preparation of | | | | 30 days of the occurrence of the special event. |
| informative, fair, and independent audited financial | | | | Such special events include change of name or |
| statements. The PCAOB’s goal is to improve | | | | contact information, withdrawal of an audited |
| the quality of audited financial statements, reduce | | | | financial statement by an auditor if the client did |
| the risk of auditing failures, and increase public | | | | not report withdrawal in the 8-K filing with the |
| trust in financial reporting processes and of the | | | | SEC, and if legal, administrative, or disciplinary |
| auditing profession. The PCAOB has established | | | | action have been taken again the firm or its |
| auditing, quality control, ethics, and independence | | | | related accountants. These reports, along with |
| standards to be used by registered public | | | | reports from the PCAOB on its inspections of |
| accounting firms in the preparation of audited | | | | public company audits will be available to the public |
| financial statements for publicly traded companies, | | | | on their website. |
| as required by the Sarbanes-Oxley Act of 2002 | | | | It is the responsibility of the registered CPA firms |
| and the rules of the Securities and Exchange | | | | that audit financial statements for public |
| Commission . | | | | companies to provide accurate and independent |
| The Sarbanes-Oxley Act of 2002 requires the | | | | reports. By following the rules and regulations of |
| PCAOB to: register all CPA firms that audit public | | | | the PCAOB, AICPA, and GAAP, registered CPA |
| companies; inspect registered CPA firms annually | | | | firms can provide the highest quality of audited |
| for those who annually audit over 100 public | | | | financial statements that fairly and accurately |
| companies and a minimum of once every three | | | | represent the public company, detect material |
| years for those that audit under 100, assess the | | | | misstatements and false or missing information |
| degree to which the CPA firms comply with the | | | | caused by fraud, and protect the interest of |
| act, the rules of the PCAOB and the SEC, | | | | investors. |
| professional standards in connection with the | | | | |