Conversation with the PCAOB's Joseph St. Denis (#104)
/In this podcast episode, we discuss the functions of the Public Company Accounting Oversight Board with Joseph St. Denis, director of its Office of Research and Analysis. Key points are:
The PCAOB was established by the Sarbanes-Oxley Act. It regulates those auditors who audit public companies. It does risk assessments, inspects audit firms, and looks at audit quality and control systems. It can levy fines and impose penalties. It also promulgates auditing standards for public companies.
The Office of Research and Analysis does risk assessments with a surveillance group that spots elevated risks of audit failure. It uses pattern recognition data mining systems to detect problems, and also engages in some surveillance of international firms.
Emerging issues include fair value disclosures, consolidations, revenue recognition involving multi-element transactions, and debt issues relating to the 2008 financial crisis.