Final answer:
The Public Company Accounting Oversight Board (PCAOB), created by the Sarbanes-Oxley Act of 2002, has the authority over auditors of publicly traded companies, while the SEC oversees the PCAOB.
Step-by-step explanation:
The organization that has the authority to register, inspect, and discipline auditors of all publicly owned companies is the Public Company Accounting Oversight Board (PCAOB).
Established by the Sarbanes-Oxley Act of 2002, the PCAOB ensures that auditors follow stringent standards when they are examining the financial statements of publicly traded companies.
The PCAOB operates under the oversight of the Securities and Exchange Commission (SEC), which is a federal agency responsible for protecting investors and maintaining fair, orderly, and efficient markets.
These regulatory institutions are crucial for maintaining corporate governance and investor confidence, particularly after financial scandals such as the collapse of Lehman Brothers due to governance failures.