Financial Accounting Blog

Monday, August 18, 2003

Letter from Acting SEC Chief Accountant to the AICPA

Until recently, the American Institute of Certified Public Accountants (AICPA) has promulgated rules for conducting audits. The Sarbanes-Oxley Act, however, gave that power to a new organization. This letter from the SEC to the AICPA indicates that there's already bad blood between these two groups.
"The Commission staff is concerned that these quotes create the misleading impression that the ASB will adopt final standards in this area that will be applicable to the audits of public companies' financial statements. As you know, the Sarbanes-Oxley Act grants the Public Company Accounting Oversight Board ("PCAOB") the authority to set auditing standards to be used by registered public accounting firms in the preparation and issuance of audit reports required by that Act or by the rules of the Commission.

I hope this letter clarifies the Commission staff's position regarding the PCAOB's standards-setting authority and the potential impact of the ASB's efforts. "