Publicly held companies must navigate a challenging regulatory landscape. One of the most critical aspects of compliance you may be concerned about is passing a thorough public company audit from the Public Company Accounting Oversight Board (PCAOB). Understanding the nuances of PCAOB audits isn’t always clear-cut, but it’s necessary to ensure both legal and financial success. Understanding the five key roles and entities involved in a public company audit can help businesses comply with the SEC’s regulations and secure their financial viability.
1. Public Company Accounting Oversight Board (PCAOB)
The PCAOB is a congressionally established nonprofit organization responsible for overseeing audits of public companies within the United States to protect investors’ interests. PCAOB members inspect and assess PCAOB auditors, Form 10-Ks, Forms 10-Q, Form 8-Ks, S-1s, and other financial disclosure documents.
2. Securities & Exchange Commission (SEC)
The SEC has oversight authority over the PCAOB, including approval of rules, standards, and budget proposals. The SEC also reviews all PCAOB reports before they are released publicly, ensuring accuracy and compliance with federal securities laws. Additionally, they investigate possible violations of federal securities laws related to public companies’ financial statements and disclosure documents. After submitting Form 10-K, the SEC can provide feedback or request more information as needed.
3. SEC Counsel
The role of the SEC counsel in the public company audit is to help ensure the publicly held company adheres to SEC rules and regulations for filings and disclosures. They will also help prepare Form 10-K for submission to the SEC.
4. EDGAR Agent
An EDGAR agent helps companies file electronically through EDGAR Online Filing System. As part of their role, they can help process and convert the original financial documents from a company into EDGAR-compatible formats for the SEC. An EDGAR agency can also troubleshoot any problems that may arise during or after submitting those documents.
5. Publicly Registered Accounting Firm
A registered public accounting firm is hired to perform the SEC audit for a client. The CPA should be registered with the PCAOB and have experience performing audits on publicly traded companies and knowledge about GAAP standards and regulations.
Your Public Company Audit
A successful PCAOB audit requires collaboration between several key players—including legal counsel, independent CPAs, EDGAR Agents, SEC representatives, and members of the board itself—all working together toward one common goal: protecting investors’ interests through accurate financial reporting from publicly held businesses.
At Assurance Dimensions, our experienced team of audit professionals can help make the audit process manageable and successful. With our unmatched expertise, we can answer all your public company audit questions, keep you updated with PCAOB auditing standards, and provide guidance on the best preparation for the audit. Contact us today to learn more about our audit and assurance services.
