The Public Company Accounting Oversight Board is planning to crack down on audit firm supervision and to ask Congress to lift the veil of confidentiality that Sarbanes-Oxley granted to audit enforcement proceedings.
The board published a warning to audit firms that it plans to start taking action against firms that fail to supervise their auditors properly, even considering new rules that would require audit firms to more clearly document how they assign supervisory responsibilities that already exist under other audit requirements. Sarbanes-Oxley gave the PCAOB authority to impose sanctions on firms or their executives when they fail to properly supervise someone who ultimately commits a violation of audit rules, but the PCAOB has never pursued an enforcement act based on that authority, said acting Chairman Dan Goelzer.
