The article was written to address the problems that faced the Public Company Accounting Oversight Board in performing its regulatory duties. It specifically looks into the Enforcement and Investigations department of the board. The article was written after some comments were made by the department’s director. According to the article, he expressed disappointment in the amount of resistance they were facing from firms they tried to regulate. He seems equally disappointed by the legal restraints his department faces in conducting its duties. The board’s main duty is regulating accounting personnel and firms in the public sector. The article is looking into particular current issues that have been affecting the board’s regulatory duties. These issues comprise both legal and moral. The Enforcement and Investigations department is responsible for carrying out frequent and often unscheduled audits into firms’ activities. The article is also looking at the perception the public has on the operations of the board. It mentions a recent case of an accountant that was widely publicized.
The article focuses on information gathered from the director of Enforcement and Investigations at the board. He is disappointed that even though the practices the board regulates are very important especially to the public, the board cannot mention anything about such proceedings to the public. The law prohibits anyone involved in such a case from disclosing information on the case until it is settled (Johnson 5). This seems very unfair to the public. The director mentions that even if the accounting firm being investigated is related to another investigation by the Securities Exchange Commission, it cannot disclose any information to the SEC about the public company. The author notes that there is very minimal information about the procedures of the board, available to the public.
The director complains that once the department starts to investigate an accountant or accounting firm, there is usually little cooperation from personnel. There is also evidence of tampering of records. The director proceeds to mention a recent case in which an accountant from Ernst and Young was barred for three years and agreed to pay a $500,000 fine (Johnson 3).
The article mentions that the board is urging for legislation in Congress to help them deal with such situations better. The board wants Congress to make a change in the Sarbanes-Oxley Act. This change will allow more information about ongoing cases to be disclosed. The director also notes that there is a bad case of unreliable witnesses. This compromises the cases the board handles. There is a mention that the Commodity Futures Trading Commission recently acquired the power to go after witnesses that lie and impose fines. The legislation would allow the board to gather more information from the public. Also, in my opinion, this legislation will help the perception the public has towards regulatory professions which would foster a good working relationship between the two parties.
The article argues that the regulatory practices and the problems that face the board undermine its significance. It is important to note that regulatory boards protect the public from the corporate world. They have an over whelming task of following all the rules while the organizations they regulate do not have to follow these rules. I agree with this argument since the Public Company Accounting Oversight Board is important, especially in this era off increased and significant white collar crimes. Accountants have become very dangerous in relation to finance. The board requires more authority over firms than it required decades ago since with time, the task of regulating accountants has become overwhelming. Legislation is a good start in strengthening the board to protect the public better. I however believe that the article was biased and did not show the arguments against the operations of the board in a neutral or positive way.
Works Cited
Johnson, Sarah. “Auditors Monkeying around with Documents: Top PCAOB Cop Says.” CFO, 19 Apr. 2012. Web. 27 Apr. 2012. (http://www.cfo.com/article.cfm/14634875)
