PCAOB Focusing In on SOX Provisions

The PCAOB on Thursday issued a release discussing certain provisions of the Sarbanes-Oxley Act of 2002 (SOX).


The two-part release focuses on the application of the act’s section 105(c)(6), which authorizes the PCAOB to sanction registered firms and their supervisory personnel for failing to “reasonably supervise” associated individuals who violate certain laws, rules or standards.


The PCAOB is seeking comments on the discussion in part of the release about concepts for possible rulemaking or standard setting that, “without imposing any new supervision responsibilities, would require firms to make and document clear assignments of the supervision responsibilities that are already required to be part of any audit practice.” Comments are due Nov. 3.


The release separately highlights the scope of the application of section 105(c)(6). The PCAOB stressed that this part of the release is not a rule or rule proposal.


Also Thursday, PCAOB Acting Chairman Daniel Goelzer directed staff to develop a proposal requesting that Congress consider a change to SOX that would allow the PCAOB’s disciplinary hearings and related proceedings to be made public. Currently those hearings and proceedings are required to be closed to the public unless the board finds good cause to make them public and all parties consent to open them to the public.


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