New Risk Assessment Standards – Lessons Learned

In the early part of this decade the auditing profession was affected significantly by passage of the Sarbanes-Oxley Act and the formation of the Public Company Accounting Oversight Board (PCAOB). Both can be attributed in part to certain high profile audit failures and large public company bankruptcies including Enron and MCI/Worldcom. But what is often overlooked is that even before the high-profile bankruptcies and the enactment of the Sarbanes-Oxley Act the auditing profession had begun at the request of the Securities and Exchange Commission (SEC) just a few years earlier a comprehensive review and evaluation of the way independent audits of financial statements of publicly traded companies were performed through the Public Oversight Board’s (POB) Panel on Audit Effectiveness.