Congress created the Public Company Accounting Oversight Board following the collapse of Enron and Arthur Andersen, as part of the Sarbanes-Oxley Act. Its purpose was to regulate the nation’s auditors. More than a decade on, PCAOB is finding auditors are still falling short. This year, the board is determined to change that.
Robert Hirth is a senior managing director of consulting firm Protiviti and a member of PCAOB’s Standing Advisory Group.
“So I think what public company officials are going to see is stepped up audit procedures, and that means more work by their auditors, more questions that they’ll have, what I’ll call more skepticism in the answers that they get from the company, and then possibly higher fees.”
One of the most controversial rules under consideration would require companies to change audit firms every few years. The concern is that long-term relationships between auditors and their clients breed complacency.