|ABOUT THE POB
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|About the POB
The Public Oversight Board (POB) is the cornerstone of the self-regulatory system that oversees the accounting profession in the United States. The POB exists to help assure regulators, investors and the public at large that audited financial statements of public corporations can be relied upon to provide an accurate picture of the financial health of those companies.
The POB was created in 1977 as an independent private sector body charged with overseeing and reporting on the programs of the SEC Practice Section (SECPS), also created in 1977 by the American Institute of Certified Public Accountants. The SECPS is composed of accounting firms that audit the financial statements of some 17,000 public corporations that file reports with the Securities and Exchange Commission. The SECPS establishes quality control requirements for member firms. In this regard, it requires that each member firm undergo peer review every three years. It also reviews allegations of audit failure to determine if there is any breakdown in a firm's quality control system.
In February of 2001, a Charter for the POB was announced which strengthens and broadens the Board's oversight of the accounting profession. The Charter authorizes the POB to oversee not only the SEC Practice Section, but also the Auditing Standards Board and the Independence Standards Board.
Funded by dues paid by SECPS members, the POB is autonomous. The five board members
represent a broad spectrum of business, professional, regulatory, and legislative
experience. Its independence is assured by the power to set its own budget, establish its
own operating procedures, and appoint its own members, chairperson, and staff.
The March 31 date is selected to provide time needed for coordination
with the SEC Practice Section and for transitioning important tasks now
underway, such as monitoring the implementation of the recommendations
of the Panel on Audit Effectiveness; overseeing the Auditing Standards
Board, the SEC Practice Section, the Peer Review Committee and the Quality
Control Inquiry Committee; conducting the special independence reviews
of the Big 5 accounting firms; and, based upon the POBs more than
20 years experience, offering suggestions as to how the existing
self-regulatory structure, now rendered largely ineffectual, might be
substantially strengthened. The members of the POB believe that its professional
staff can be a continuing resource beyond March 31 in assisting in the
creation of a new and effective self-regulatory regime.
© 2003 Public Oversight Board