We acknowledge the insight and assistance of Gary J. Previts, Distinguished University Professor Emeritus, Case Western Reserve University  

As the regulator of public company auditors, following the Sarbanes-Oxley Act of 2002, the Public Company Accounting Oversight Board (PCAOB) aims to safeguard investors’ interests. The PCAOB establishes auditing standards, reviews audit firms’ performance, and holds them accountable for complying with its rules and the securities laws.

Although the PCAOB does not have direct oversight of board audit committees, its auditing standards and enforcement actions influence their expectations and actions at times.  Lately, the PCAOB has deliberately leveraged its enforcement powers to target audit committees in a “sweep” program.

The PCAOB uses sweeps to investigate a specific type of potential violation across multiple firms simultaneously.  Sweeps involve gathering information from various sources to identify and address common deficiencies.  The latest sweep focused on auditors who failed to communicate properly with audit committees, as required by PCAOB standards.

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