Auditing - Public Company Accounting Oversight Board

The PCAOB, established by the Sarbanes-Oxley Act of 2002, sets auditing standards and inspects accounting firms for publicly traded companies in the US. It consists of a five-member board appointed in partnership with the SEC. The PCAOB inspects large firms annually, while others are selected randomly or based on risk. Audits are evaluated for compliance with standards, and deficiencies are addressed with management. If unresolved, they appear in public inspection reports, which can lead to enforcement actions, including barring firms from public audits.

Describe the role of advisory groups in relation to the PCAOB.

What are the potential consequences of substantial deficiencies noted in inspection reports?