Question

Which of the following is not correct with regard to the public company accounting oversight board? multiple choice

O all registered auditing firms must be inspected at least every three years.
O the board can expel a registered auditing firm without sec approval.
O the board has the authority to set auditing standards rather than utilize the work of the auditing standards board.
O the board members must be appointed by congress.

Answer 1

The incorrect statement about the Public Company Accounting Oversight Board is that its board members must be appointed by Congress. In actuality, they are appointed by the SEC.

Step-by-step explanation:

The PCAOB is a nonprofit organization that oversees auditors of public companies to protect investors and promote high-quality audits. It was created by the Sarbanes-Oxley Act of 2002 in response to accounting scandals such as Enron and WorldCom. The PCAOB is a nonprofit corporation established by Congress through the Sarbanes-Oxley Act of 2002, which provides oversight over auditors of public companies to protect investors and the public interest by promoting informative, accurate, and independent audit reports.

All registered auditing firms are indeed subject to inspection at least every three years. Furthermore, the PCAOB does have the authority to set auditing standards and can expel a registered auditing firm, though such actions may require Securities and Exchange Commission (SEC) approval. However, board members are not appointed by Congress; they are appointed by the SEC, after consultation with the Chair of the Board of Governors of the Federal Reserve System and the Secretary of the Treasury.