PCAOB, The (A)

Lynn S. Paine; Kim  Bettcher

Case | HBS Case Collection | February 2005 (Revised March 2006)

PCAOB, The (A)

by Lynn S. Paine and Kim Bettcher

Abstract

Members of the Public Co. Accounting Oversight Board--a private-sector, nonprofit body created by the Sarbanes-Oxley Act of 2002--must determine the form and content of a new auditing standard on internal control that will fulfill the requirements of Section 404 of the act. After receiving comments from issuers, investors, and accounting firms, board members contemplate the necessary scope of an audit engagement to evaluate the effectiveness of internal controls and restore investors' confidence in financial reporting. Gives students an opportunity to consider the role of external regulation and self-regulation and such issues as the difficulties of cost-benefit analysis for proposed regulations, the relation between rules and discretion, the differences between investor and executive perspectives, and the apportionment of responsibilities among management, internal auditors, and external auditors.

Keywords: Law; Financial Reporting; Corporate Governance; Standards; Government Administration; Accounting Audits;

Format: Print

15 pages

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Citation:

Paine, Lynn S., and Kim Bettcher. "PCAOB, The (A)." Harvard Business School Case 305-025, February 2005. (Revised March 2006.)

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PCAOB, The (A)

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PCAOB, The (A)

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