GOVERNMENT REGULATION OF （政府监管的）.pdf

GOVERNMENT REGULATION OF ACCOUNTANTS: THE PCAOB ENFORCEMENT PROCESS Jerry Wegman College of Business and Economics University of Idaho wegman@ Distinguished Research Award Winner, Allied Academies 2006 ABSTRACT In 2002 the federal government altered the landscape of the accounting profession by creating, for the first time, a fe deral regulatory agency for this profession: the Public Company Accounting Oversight Board (PCAOB). Congress responded to the massive corporate failures of Enron, Tyco and others by enacting the Sarbanes-Oxley Act (SOA), to improve corporate governance and the reliability of financial information. Sarbanes-Oxley created the PCAOB to oversee the work of public accountants, the creators of corporate financial information. The purpose of this paper is to provide insight and understanding into the PCAOB’s enforcement process. This is important to public accounting students and practitioners. By gaining insight into how and why the PCAOB regulates as it does, needless conflict can be avoided and a constructive, mutually beneficial relationship will likely ensue. This paper begins with an overview of government regulation, in order to show how the PCAOB fits into the general context of regulation. Then we review the Sarbanes-Oxley Act, which created the PCAOB. Next we consider the PCAOB, noting its unique features. The paper then describes and analyzes the PCAOB’s enforcement mechanisms. Finally we conclude with recommendations as to how accountants can most constructively interact with the PCAOB. INTRODUCTION When President Bush signed the Sarbanes-Oxley Act (SOA)1 in 2002 he stated that it created “the most far-reaching reforms of American business practices since the 2 time of Franklin Delano Roosevelt” . The SOA was a federal response to the massive corporate failures of Enron, Tyco and others. These failu