Latest news with #PublicCompanyAccountingOversightBoard
Wall Street Journal
6 days ago
- Business
- Wall Street Journal
PCAOB Chair, in Last Days, Warns Against Potential for Budget Slashing
Erica Williams, the departing leader of the Public Company Accounting Oversight Board, urged regulators to still provide adequate resources to the auditing watchdog after her resignation at the request of the Securities and Exchange Commission chairman. 'My biggest concern is that people pull back from the PCAOB's mission and not provide the staff with the resources that they need to continue to deliver for investors,' Williams said in an interview Thursday. She added that is a particular concern now given that fraud risk is heightened when the economy tightens.
Reuters
15-07-2025
- Business
- Reuters
US SEC ousts head of accounting watchdog, email says
July 15 (Reuters) - The U.S. Securities and Exchange Commission has pushed out the head of the U.S. watchdog that oversees public company auditors, according to an email to staff seen by Reuters. Erica Williams, who has led the Public Company Accounting Oversight Board since 2022, said in the email her last day will be Tuesday, July 22, after SEC Chairman Paul Atkins asked her to resign. The PCAOB in a statement confirmed Williams' departure, and Atkins said in a statement that he had accepted Williams' resignation and thanked her for her service. The removal of Williams, a Democrat, has been expected after Republicans took control of the SEC earlier this year. New leaders at the agency have in the past ousted the heads of the PCAOB. Under Williams' leadership, the PCAOB overhauled rules for auditors and ratcheted up pressure through record-setting penalties for misconduct. Williams told staff in her email she did not know who would take over leading the PCAOB, a nonprofit created by Congress in 2002 in response to a series of high-profile accounting scandals and auditing failures. "Together we have accomplished more to protect investors through our standard setting than any Board since the PCAOB was established," she said in the email.
Yahoo
14-07-2025
- Business
- Yahoo
PCAOB fines PWR CPA for audit failures and reporting violations
The Public Company Accounting Oversight Board (PCAOB) has imposed sanctions on PWR CPA for breaches of its regulations during the 2022 audit of Ainos, alongside repeated non-compliance with reporting obligations for four other issuer audits. The disciplinary order, issued as a settled matter, was announced in a PCAOB statement. PWR CPA agreed to a $60,000 fine and committed to implementing corrective measures before submitting any future PCAOB registration application. The firm neither admitted nor denied the findings outlined in the order. The oversight board identified several violations in PWR's audit of Ainos for the year ending 31 December 2022. These included a failure to carry out necessary risk assessment procedures, inadequate evaluation of certain issues for designation as critical audit matters, and a lack of inquiries with Ainos' audit committee regarding fraud risks. PCAOB standards mandate that auditors perform sufficient risk assessments to identify material misstatement risks, whether due to error or fraud, and to design appropriate audit procedures to safeguard investors. Oversight board chair Erica Williams said: 'When auditors fail to appropriately evaluate fraud and other risks, they undermine investor protection.' The oversight board noted that PWR's shortcomings heightened risks to investors. Additionally, the PCAOB found that PWR failed to submit nine required Form APs on time, which disclose specific audit participants. The firm also neglected to file a mandatory Form 3 to report the appointment of a partner previously barred by the Securities and Exchange Commission (SEC) from practising as an accountant before the agency. The investigation was conducted by PCAOB enforcement staff members Davis Taylor, Celia Lawson, and Sina Mansouri, under the supervision of William Ryan and John Abell. PCAOB Enforcement and Investigations division director Robert Rice said: 'Firm personnel must conduct audits in accordance with PCAOB rules and standards, particularly when evaluating potential fraud risks. 'This case is another example of the PCAOB holding firms accountable for violations of core PCAOB rules and standards.' "PCAOB fines PWR CPA for audit failures and reporting violations" was originally created and published by International Accounting Bulletin, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Time Business News
27-06-2025
- Business
- Time Business News
Fix Your Audit Documentation Before It Fails
Audit documentation requires proper organization and maintenance to ensure transparency, support accountability, and meet all applicable regulations. Concise records, whether used for internal control or external audit purposes, help the teams in confirming transactions, tracking decisions, and resolving discrepancies promptly. Yet, most organizations inadvertently confuse their audit documentation by inserting loose image-based documents, particularly PNGs. Approval screenshots, scanned receipts, or system outputs preserved in the PNG format tend to be loose and unstructured. Unstructured files inevitably lead to slow audits and opportunities for errors. This piece provides real-world advice for keeping audit records tidy and coherent. From a true-to-life example, you can observe how small steps such as normalizing file formats can help minimize audit prep mayhem. Whether you work in an internal audit department or are developing compliance reports, this primer will assist you in keeping your audit records neat and organized. Writing Highlights PNGs clutter audit trails. PDFs ensure format consistency. Mixed file types slow down reviews. Format switching wastes time. Indexing boosts traceability. Central storage prevents duplication. Assign roles for documentation. Standardization speeds audits. Audit Reviews Get Complicated When Files Aren't Standardized Audit procedures rely on traceable, dated, and summarized evidence. Every document – a receipt, system printout, or approval has to be easily attributable to a particular transaction or step of control. Unless you have templates for consistent formats, it is difficult and error-prone to keep such a trail. According to the Public Company Accounting Oversight Board (PCAOB), staff expect that approximately 40% of the audits reviewed will have one or more deficiencies in 2024. These deficiencies are often related to poor documentation practices, including inconsistent formats that obscure the completeness, accuracy, or relevance of audit evidence. PNG Files: Convenience with Hidden Costs PNGs are most frequently utilized for screenshotting approvals, scanned invoices, or transaction histories. Convenient as it may be, PNGs do not have rudimentary features such as metadata, version history, or in-built markup functions. PNGs are thus hard to contextualize, annotate, or combine, frequently causing review delays as well as communication lapses within audit cycles. Fragmented Formats Slow Workflow and Increase Risk Where audit folders contain a combination of PNGs, PDFs, spreadsheets, and emails, the trail of audit becomes more difficult to track. Reviewers are compelled to toggle between tools, manually assemble support evidence, and stitch together fragmented stories, particularly troublesome in tight reporting timelines. Without format standardization, teams stand to lose precious time and miss important details. PCAOB's perspective supports this: documentation quality and consistency continue to be ongoing issues that have a direct bearing on audit effectiveness and reliability, especially in workflows involving steps like budget approval. Discrete PNGs Form Bottlenecks PNG files are often the guilty party in causing documentation chaos. Approvals or system outputs are routinely captured as PNGs and never merged. Scanned documents, receipts, and contracts often get exported as PNG images. Comments or annotations could be applied to PNGs manually and would make them difficult to search or index. Having dozens or hundreds of individual PNG files is a waste of time for auditors, who must sort, rename, and mark up each image. Context is lost when a screenshot is not embedded in the entire document. Auditors frequently find themselves converting PDF to PNG just to obtain a markup layer, or vice versa, which results in a back-and-forth process that saves no time and causes confusion. Inconsistent Formats Disrupt Internal Controls Where audit documentation is scattered among different file formats (JPG, PNG, PDF), a lot of unnecessary confusion and back-and-forth occurs. Different formats will be handled differently: Some are more difficult to annotate, others are unwieldy to merge or search, and not all systems support each type consistently. This inconsistency tends to disrupt both the workflow of the preparers and reviewers. Audit teams depend on a uniform format to confirm supporting proof promptly. When someone files a combination of images, unsearchable documents, and solitary PDFs, it makes reviewers unnecessarily change tools over and over again simply to view or read information. That leaves room for mistakes, lost approvals, unauthorized numbers, or copied entries. Time Lost to Format Conversions One of the significant time sinks in audit work is having to keep converting PDF to PNG for screenshots or visual references, or vice versa, aggregating image files into a single document. These conversions are not always smooth, particularly when performed manually. Non-uniformity not only wastes time but also disrupts audit trail continuity. Envision having to review five documents for one transaction: a PNG for the screenshot of the invoice, a JPG for the payment receipt, and a PDF for approval. Without proper formatting, the information flow becomes disjointed. Reviewers might lose track of steps or take extra time to reorder the evidence constructively. Difficulty in Maintaining Data Integrity With inconsistent structures, data integrity becomes more difficult to ensure. Image files may be edited or cropped without any audit trail, compared to PDFs, which have timestamped comments, password security, and change tracking. This results in difficulty proving authenticity, particularly where audits need version control or verifiable timelines. Audit Evidence Transformed into a Document Nightmare I was completing our year-end audit package, and receipts and approvals were in PNG format. There were dozens of screenshots of vendor payment confirmations, department sign-offs, and breakdowns of the budget lying around in different folders. Every file was labeled differently, and none conformed to a standard naming convention. Manual Merging Made Everything Slower What should have only taken a day became a three-day fight. I had to open up each image, check which transaction it validated, and attempt to align it with the related ledger entry. Adding comments was another challenge, particularly because PNGs are not as easy to comment on or use markup tools like PDFs. I even ended up having to make a whole separate spreadsheet just for keeping track of what each screen cap was. Worse still, sending this batch to the audit committee involved individually attaching each picture with explanations, something that not only raised the likelihood of error but also questioned document completeness. One Change That Simplified Everything Finally, I decided to turn all the PNGs into a single reviewable file. With the use of a simple converter to change PNG to PDF, I was able to finally put the audit trail into a neat, uninterrupted flow. This one document clustered like approvals, payments, and reasons together, in the sequence they were found in our general ledger. What had previously appeared to be an unruly cluster of disorganized papers now became a clear, well-organized paper awaiting inspection. Well-defined Structure Assures Fewer Mistakes Once converted, my comments were simpler to insert, and reviewers could scroll through the document without having to flip between formats or tabs. It minimized the number of reviewer questions and eliminated misunderstandings due to mismatched or missing approvals. The audit committee loved the clarity and even mentioned that this year's submission was simpler to review compared to earlier ones. Best Practices to Avoid a Cluttered Audit Trail By implementing these best practices throughout, audit teams can eliminate ambiguity, keep an unbroken chain of evidence, and enable effective, error-free examinations. Below are some of the best practices: Use Standardized File Types Consistency of file types minimizes confusion and facilitates ease in tracking the trail of documentation for auditors. PDF is the most preferred because it has a fixed layout, tagging and annotation capabilities, and system compatibility. It is different from PNG files or any image-based type of format because PDF keeps documents' context intact and prevents content from being inadvertently changed or misread. Batch Conversions Early Waiting to get organized and convert files until the last audit phase inevitably means that the resulting documentation is hurried and prone to errors. Get all supporting documents, particularly images such as PNGs, converted into PDFs early in the process. This keeps the documentation coordinated right from the start and prevents last-minute formatting issues. It also minimizes having to keep converting repeatedly later on or encountering issues when attempting to convert PDF to PNG for rechecking. Maintain an Index An indexed audit trail lets the reviewer easily find pertinent documents without the need to browse through folders. A basic spreadsheet with each document, its file name, related audit area, and inclusion date is usually enough. This enhances transparency as well as exhibits procedural discipline when conducting audits. Centralize Storage Storing papers on multiple drives or email threads creates redundancy and disorganization. Adopt a central, access-controlled folder or document management system where all audit proof is stored in a single location. Organize folder structures by audit phases or categories—e.g., revenue, procurements, payroll. Assign Documentation Responsibility Assign an individual or team to handle and review the audit paper as it's gathered. This prevents a situation where files are accumulated randomly or left undone. Explicit roles also maintain that formatting and file quality checks occur on an ongoing basis, not only during audit season. Version Control is Key When updating documents, save more recent versions with timestamps or version numbers marked. This avoids having old documents submitted by mistake and keeps changes easily trackable for audit review. Final Considerations Clean audit documentation has as much to do with adopting regular, ordered practices early in the process as it does with using sophisticated tools. From selecting standardized file types to categorizing labeled and centralizing storage, every step contributes to less confusion and greater audit readiness. As in the actual case presented, minor decisions, such as converting PNGs into one combined PDF document, can have a remarkable effect on efficiency and clarity. By taking proactive approaches to formats and workflows, audit teams can enhance accuracy, aid compliance, and make audit cycles more efficient and dependable. TIME BUSINESS NEWS
The Hill
06-06-2025
- Business
- The Hill
US markets need accountability — it would be a mistake to dismantle Sarbanes-Oxley
Recently, the House Financial Services Committee approved a proposal to dissolve the Public Company Accounting Oversight Board, which supervises audits of publicly listed companies, and transfer its responsibilities to the Securities and Exchange Commission. In times of economic uncertainty, the strength and integrity of our financial systems become even more crucial. Regardless of the outcome with the board, it would be a mistake to eliminate the broader Sarbanes-Oxley framework that has served as a foundation for market integrity since 2002. Dismantling these guardrails would increase the risk of financial reporting fraud that could trigger a crisis of confidence among investors and increased market volatility, putting trillions of dollars in market value and retirement savings at risk. The bipartisan Sarbanes-Oxley Act was enacted in 2002 in the wake of a number of accounting scandals, most prominently Enron and WorldCom, which wiped out billions in market value and retirement savings. It passed with overwhelming support in both houses, reflecting the urgency lawmakers felt to address the crisis threatening our capital markets. At its core, Sarbanes-Oxley established crucial guardrails. Section 404 requires companies to maintain robust internal controls over financial reporting, while Section 302 mandates that CEOs and CFOs personally certify the accuracy of financial statements. These provisions ensure that those who lead corporations are accountable for the integrity of their financial disclosures. Sarbanes-Oxley also established independent oversight of auditors responsible for verifying financial statements. This provided essential third-party assurance that investors could trust what companies report — a crucial element in rebuilding market confidence. Critics of Sarbanes-Oxley complain that compliance costs are a burden on businesses. While initial implementation was indeed expensive, companies have since learned to leverage technology and risk-based approaches to streamline the process. Research from firms like Protiviti and AuditBoard consistently shows that these costs have decreased over time as processes have become more efficient. More importantly, we must weigh these costs against the benefits. The data is compelling: financial restatements, which initially surged after Sarbanes-Oxley implementation as companies 'cleaned up' their books, have shown a sustained downward trend. According to the Center for Audit Quality, restatements rose sharply right after the law was enacted, to nearly 1,800 in 2006, but have generally trended downward overall since — with a substantial decline of 60 percent between 2006 and 2009. Restatements dropped 50 percent, from 858 restatements in 2013 to just 402 in 2022, XBRL reported. America's capital markets remain the envy of the world precisely because investors trust them. Foreign companies willingly subject themselves to our rigorous standards because the resulting investor confidence translates into better valuations and capital access. This trust premium has contributed to trillions in market value growth over the past two decades. As this regulatory reorganization is considered, we should ensure that any structural changes don't inadvertently weaken the broader framework of Sarbanes-Oxley that delivers accountability, transparency and investor protection. Instead, continued refinement of implementation and embracing technological innovations can make compliance more efficient without sacrificing effectiveness. The goal is evolution, not revolution. Twenty-three years after its passage, Sarbanes-Oxley has become an integral part of America's financial architecture, contributing to a period of remarkable growth and stability in our capital markets. The political right and left came together to enact this landmark legislation because they recognized a fundamental truth: without trustworthy financial reporting, markets cannot function effectively. Today, that core principle remains unchanged. While organizational structures may evolve, preserving the integrity of Sarbanes-Oxley's core principles isn't just good for investors — it's essential for America's continued economic leadership. Richard Chambers worked in auditing in the U.S. Government Accountability Office. He is currently CEO of Richard F. Chambers and Associates and senior adviser at AuditBoard.
