Question

The Public Company Accounting Oversight Board:____.

A. establishes accounting principles only for issuers.
B. interacts with the IASB in an effort to bring about convergence.
C. must report to the Securities and Exchange Commission as a matter of federal law.
D. All the above are true.
E. None of the above is true.

Answer 1

Answer: C. must report to the Securities and Exchange Commission (SEC) as a matter of federal law.

Step-by-step explanation:

The Public Company Accounting Oversight Board (PCAOB) is a non-profit organization that was established after the disastrous accounting scandals of the early 2000s and late 1990s involving companies like WorldCom and Enron.

The purpose of the organization is to ensure that the audits of a public company are done in such a way that audit risk is reduced and the audit report is as accurate as possible. Even though they are a non-profit, the Sarbanes-Oxley Act mandates that they report to the SEC which has oversight over them.