Perceived Flaws in Sarbanes-Oxley Implementation
CPA Journal, The › Vol. 76 Nbr. 9, September 2006
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Summary
Discontent with the implementation of the Sarbanes-Oxley Act of 2002 (SOX) by the Public Company Accounting Oversight Board (PCAOB) continues. Both the SEC and the PCAOB recognized that serious problems persist when they held a second roundtable on May 10, 2006. The 234 comment letters related to the first roundtable meeting in Apr 2005 included expressions of discontent beyond the cost and insufficient guidance for internal control assessment. Among such comments were the following perceived flaws: 1. Redundancy of opinions by auditors. 2. Rule setting and oversight provided by the same body is a questionable combination. 3. Auditing standards-setting under two bodies in one country is costly and inefficient. 4. Stripping the profession of standards-setting responsibility means that accountants auditing publicly owned business are not professionals. The PCAOB's structure as designed by the board itself is flawed. The implementation of SOX to date has added a great deal of auditing work, yet questions of relevance remain unanswered.
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Extract
Perceived Flaws in Sarbanes-Oxley Implementation
Discontent with the implementation of the Sarbanes-Oxley Act of 2002 (SOX) by the Public Company Accounting Oversight Board (PCAOB) continues. Both the sec and the PCAOB recognized that serious problems persist when they held a second roundtable on May 10, 2006. In a press release announcing this second meeting, acting PCAOB chairman Bill Gradison stated, "I am very much open to suggestions to make the internal control assessment process more efficient, including modifications of the PCAOB's auditing standard and other actions the Board could undertake."
The 234 comment letters related to the first roundtable meeting in April 2005 included expressions of discontent beyond the cost and insufficient guidance for internal control assessment. Gradison's reference to "other actions" was reassuring. Comments in some letters, illustrative of perceived flaws in the implementatio...See the full content of this document
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