14_REGULATION_OF_AUDITING - REGULATION OF AUDITING IN THE...

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REGULATION OF AUDITING IN THE UNITED STATES 1  In the United States, the Securities and Exchange Commission (SEC) is the federal regulatory agency established by the U.S. Congress in 1933 to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. The SEC indicates that its mission is “to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” The SEC further states that “the common interest of all Americans in a growing economy that produces jobs, improves our standard of living, and protects the value of our savings means that all of the SEC's actions must be taken with an eye toward promoting the capital formation that is necessary to sustain economic growth.” Prior to the Sarbanes-Oxley Act of 2002 (SOX), the American Institute of Certified Public Accountants (AICPA) and its Auditing Standards Board developed and enforced auditing standards (i.e., the objectives and procedures of audits and auditing) in the United States. In addition, the various state boards of accountancy regulate who may practice as a U.S. CPA. 2 SOX, however, changed regulation of the auditing profession and auditing of company’s financial statements. 3 SOX moved the responsibility for regulation of auditing from the AICPA to a public regulatory entity created by the SOX and appointed by the SEC, known as the Public Company Accounting Oversight Board (PCAOB). 4
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14_REGULATION_OF_AUDITING - REGULATION OF AUDITING IN THE...

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