In the Matter of PricewaterhouseCoopers LLP’s Quality Control Remediation Submissions
Public Company Accounting Oversight Board
PCAOB Release No. 104-2013-054 (2013)
- Written by Heather Whittemore, JD
Facts
In 2002 Congress enacted the Sarbanes-Oxley Act, which placed record-keeping and reporting requirements on corporations in order to prevent fraudulent activity that could harm investors. The Sarbanes-Oxley Act established the Public Company Accounting Oversight Board (the board) (plaintiff) to oversee audits of public companies. The board was empowered to establish auditing standards, inspect audits for quality control, investigate allegations of misconduct, and impose sanctions on firms that violated auditing rules. PricewaterhouseCoopers LLP (PwC) (defendant) was a public accounting firm that conducted audits of public companies. In 2009 and 2010, the board inspected PwC’s auditing practices and found several deficiencies. According to the board, PwC relied too heavily on work generated by the corporations it was auditing and failed to adequately deal with red flags discovered through its audits. Although the board’s reports on PwC were initially private, the board publicly disclosed PwC’s quality-control deficiencies after PwC failed to adequately address the deficiencies within a 12-month period after the board’s reports were handed down.
Rule of Law
Issue
Holding and Reasoning (Per curiam)
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