What role does the Public Company Accounting Oversight Board have under the Sarbanes-Oxley Act?

Established by Title I of the Sarbanes-Oxley Act, the Public Company Accounting Oversight Board (PCAOB) is an independent nonprofit corporation created to oversee the audits of public companies.12

Its primary purpose is to protect the interests of investors and promote the public interest by ensuring that audit reports are informative, accurate, and independent. The board consists of five members who are appointed by the Securities and Exchange Commission to serve staggered five-year terms.2

This oversight mechanism was a direct legislative response to the Enron scandal, which involved massive accounting fraud and the failure of auditors to prevent the concealment of debts and financial losses. By strengthening auditing standards, the PCAOB plays a critical role in the act's broader objective to reduce corporate fraud and restore trust in the financial markets.231