PCAOB and PCAB – differences in funding

//PCAOB and PCAB – differences in funding

Several people have asked me about the difference between the PCAOB in the United States, and the CPAB in Canada. Please see below for a brief synopsis – hope this clarifies.The Public Company Accounting Oversight Board (PCAOB) in the United States was created in 2002 as a result of the failures of ENRON and Worldcom. The PCAOB is composed of a five member panel with the authority to tighten quality control of audit practices and report on the results of inspections of audit firm practices. One of the key elements of the PCAOB is that it is funded by the SEC, which ensures that it has total independence and objectivity.

In Canada, the CICA helped organize the creation of its own Canadian Public Accountability Board (CPAB) to oversee the auditors of public companies. The PCAB also is also responsible for quality control and inspections of audit practices. The PCAB is funded by public audit firms, and therefore does not have the same level of independence and objectivity as does to PCAOB in the US. This is somewhat related to the fact, unlike the SEC in the United States, Canada does not have a national securities regulatory. In any event, for the time being at least, the accounting profession in Canada continues to be self-regulating.

Edelkoort | Smethurst | Schein CPAs LLP is located in Burlington Ontario servicing the Golden Horseshoe and Greater Toronto Area and beyond. The firm is fully licensed with CPA Ontario to provide assurance, tax and accounting services as well as registered as tax preparers with the Canada Revenue Agency (CRA) & Internal Revenue Service (IRS). The firm is also registered as an IRS Certified Acceptance Agent.

All blog posts published on this site are for informational purposes only and do not constitute professional advice. Readers should contact a professional to discuss their individual situation. Neither the author or the accounting firm shall accept any liability for any reliance placed on the information posted.

2016-10-14T13:27:03+00:00

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