November 3, 2010 letter commenting on PCAOB Rulemaking Docket Matter No. 031:
PCAOB Release No. 2010-005, Application of the "Failure to Supervise" Provision of the Sarbanes-Oxley Act of 2002 and Solicitation of Comment on Rulemaking Concepts
Published: Nov 3, 2010. Publicly Released: Nov 3, 2010.
This letter provides the U.S. Government Accountability Office's (GAO) comments on the Public Company Accounting Oversight Board's (PCAOB) rulemaking concepts with respect to the "Failure to Supervise" Provision of the Sarbanes-Oxley Act of 2002. We appreciate the PCAOB's efforts to further the public interest and protect investors, and agree that the quality of a firm's audit practice may be directly affected by the quality of supervision within the firm. However we have concerns about issues discussed in the release and related materials. Specifically (1) the rulemaking concepts do not align with the practice problems related to a failure to supervise, and (2) rulemaking may not be the most appropriate venue to pursue the PCAOB's stated objective.