Notes

PCAOB and FRC compared

The PCAOB oversees auditors of US public companies under SEC oversight. The FRC is the UK competent authority for audit. Both inspect audits and bring enforcement cases, but they publish and resolve cases in different ways.

• The PCAOB was established by Congress and is overseen by the SEC, whose oversight authority includes approving the Board's rules, standards and budget.¹
• The FRC says it acts as the UK's competent authority for audit and takes audit enforcement action under the Audit Enforcement Procedure.⁴
• The PCAOB says that, as required by the Sarbanes-Oxley Act, its investigations and disciplinary proceedings are confidential and nonpublic. It also publishes SEC and court actions on review of its sanctions.²
• Under the FRC Audit Enforcement Procedure, publication of sanctions is mandatory for investigation and Tribunal outcomes, while the Conduct Committee decides whether the fact of an investigation is published.⁵
• PCAOB sanctions include censures, monetary penalties and limits on the ability of a firm or individual to audit public companies or broker dealers.²
• The PCAOB says it also inspects firms that play a substantial role in issuer audits. Firms issuing audit reports for more than 100 issuers are inspected annually.³

Sources

1. Public Company Accounting Oversight Board, About the PCAOB
2. Public Company Accounting Oversight Board, Enforcement
3. Public Company Accounting Oversight Board, Firm inspection reports
4. Financial Reporting Council, Enforcement
5. Financial Reporting Council, Audit Enforcement Procedure