case study

PCAOB Enforcement Cases

Learning Objectives:

The Public Company Accounting Oversight Board (PCAOB) was created by the Sarbanes–Oxley Act of 2002 to oversee the audits of public companies. The PCAOB inspects registered public accounting firms to assess compliance with the Sarbanes-Oxley Act, the rules of the Board, the rules of the Securities and Exchange Commission, and professional standards. When the PCAOB finds violations, they may impose sanctions, including censures, monetary penalties, and limitations on a firm’s or an individual’s ability to audit public companies or broker-dealers.

The purpose of this individual analysis and oral presentation assignment is to familiarize students with the role of PCAOB and its enforcement actions. Students will gain a deeper understanding of audit documentation and quality control requirements.

Requirements:

Students will study a PCAOB enforcement report and complete the following analysis. The analysis should be summarized in a Word file (300-500 words) and include standard citations.

• Go to https://pcaobus.org/oversight/enforcement/enforcement-actionsLinks to an external site.;
• Select a report from the list. There are over 300 reports available.
• Summarize the enforcement reports and perform the following analysis.

1. Provide a summary of basic information such as the date of the report, the date range of the violations, and the name of the respondent firm.
2. Describe the rules and standards that the auditing firm violated.
3. If applicable, analyze why the Board determined that the auditing firm knowingly violated the rules and standards.
4. Describe the penalties imposed on the auditing firm.
5. Make at least two connections between our textbook and the case. We learnt about professional standards in Chapter 2, engagement planning and audit evidence in Chapter 3, risk assessment in Chapter 4& 5, as well as fraud detection in Chapter 6 to 10. Did any of the case write-up remind you of something you read from the textbook?