Audit Standard Setting and Inspection for U.S. Public Companies: A Critical Assessment and Recommendations for Fundamental Change

Authors

Steven M. Glover, Brigham Young University - Provo
Douglas F. Prawitt, Brigham Young University - ProvoFollow
Mark H. Taylor, Creighton University

Keywords

auditing standards setting, audit inspection, PCAOB, accounting profession

Abstract

The Sarbanes-Oxley Act of 2002 (SOX) established the Public Company Accounting Oversight Board (PCAOB) to oversee the public accounting firms that audit publicly traded companies in the U.S. In this commentary we outline why we believe the PCAOB’s audit standard setting and inspection models are inefficient and dysfunctional. We assert that the Board’s ability to achieve its mission is limited by its early choices, together with its incentives, organizational composition, and structure. We support our assertions with a number of indicators of serious problems and flaws in the current approach. We also present high-level recommendations for change for policy makers, regulators, and leaders in the profession to consider in developing better approaches to audit standard setting, inspection, and enforcement.

Original Publication Citation

“Audit Standard Setting and Inspection for U.S. Public Companies: A Critical Assessment and Recommendations for Fundamental Change,” Accounting Horizons, with S. Glover, and M. Taylor, 9/2009, 221-237.

BYU ScholarsArchive Citation

Glover, Steven M.; Prawitt, Douglas F.; and Taylor, Mark H., "Audit Standard Setting and Inspection for U.S. Public Companies: A Critical Assessment and Recommendations for Fundamental Change" (2009). Faculty Publications. 8609.
https://scholarsarchive.byu.edu/facpub/8609

Document Type

Peer-Reviewed Article

Publication Date

2009

Publisher

Accounting Horizons

Language

English

College

Marriott School of Business

Department

Accountancy

University Standing at Time of Publication

Full Professor

Copyright Use Information

https://lib.byu.edu/about/copyright/