An Origin Investigation: Events and Groups that Shaped the Formation of the PCAOB

• In Event: Accounting History

Abstract

Regulation has a bad reputation. Most regulatory agencies are largely ineffective or mired in controversy. The Public Company Accounting Oversight Board (PCAOB) is a relatively new agency that holds the vital role of regulator for auditors of U.S. public companies. As it is still in the early stages of its tenure, the PCAOB’s success as a regulatory agency is undetermined. For such an important organization, its history and background remain relatively unexamined. The scandals involving Enron, WorldCom, and Arthur Andersen are frequently cited as the main causes for the passage of SOX and the creation of the PCAOB. This paper seeks to add to the existing literature by clarifying the organization’s origins. The hypothesis of this paper is that there were various events as well as groups in the preceding decades, which played an integral part in the eventual creation of the PCAOB.

Author

• Robert Sheu, Case Western Reserve University