April 19, 2017Recently, several national news organizations have reported that a Big 4 accounting firm had fired five audit partners for “unethical behavior” involving the dissemination of confidential information from the Public Company Accounting Oversight Board (PCAOB) concerning inspection of the firm’s audit practice. Additionally, at least one professional staff member of the PCAOB has been released as a result of the incident. It is presumed that each of the audit partners and professional staff is licensed by one or more State Boards of Accountancy, which have the ultimate responsible for the licensure and regulation of CPAs in the United States. The PCAOB was established by Congress in 2002 to “oversee the audits of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, accurate and independent audit reports.” While the PCAOB is authorized to determine those individuals and firms that may perform audits of publicly traded companies, only State Boards of Accountancy are authorized to investigate, prosecute and potentially revoke an individual’s license or a firm’s registration to practice public accountancy, including performing audits of publicly traded companies. In recent days, NASBA has been contacted by several outside parties, regarding these recent alleged violations of ethical standards, inquiring about the anticipated response of the relevant State Boards of Accountancy. NASBA has been in contact with State Boards of Accountancy and the PCAOB, regarding these recent events and is actively supporting the State Boards of Accountancy as they assess their next steps regarding these CPAs and the firm. |
