PCAOB starts getting the job done.

• Author: Heffes, Ellen M.
• Position: Financial Reporting - Public Company Accounting Oversight Board

Wonder what actually is the job of the Public Company Accounting Oversight Board (PCAOB) that was formed as a result of The Sarbanes-Oxley Act of 2002? At a recent session in New York, PCAOB Special Counsel Mary M. Sjoquist presented an overview of the board's mission, goals and current activities.

The American Stock Exchange (AMEX) was host to "After Sarbanes-Oxley: Communicating Transparency," a briefing that was jointly sponsored by the Corporate Communication Institute at Fairleigh Dickinson University and FEI. Following the main event--the PCAOB overview--was a panel discussion with FEI Chairman H. Stephen Grace, Jr. (also president of H.S. Grace & Co. and Grace & Co. Consultancy Inc.) and Steven T. Sabatini, senior vice president and CFO of USB Holding Inc. and Union State Bank, and a director of the company.

The speakers were introduced by AMEX Vice President Bruce Poignant and Michael B. Goodman, Director, Corporate Communications Institute of Fairleigh Dickinson.

Sjoquist described her organization as the "new auditing watchdog" that was given a big bark by Congress--although, she added, many say its powers also give it a "big bite." Its broad purpose is to "protect investors by improving the accuracy and reliability of audited financial statements," and the goal of accurate and reliable financial statements is, of course, to improve the transparency of financial disclosures.

Targeting her introductory comments to the session's focus--communicating transparency--she said two primary aspects of transparency include good disclosure and a significantly improved corporate culture. She posed several questions: Could Enron have occurred if the post-Sarbanes-Oxley requirements regarding audit committees had been in place? Could HealthSouth have happened if there had been board-mandated separation of the chairman and CEO positions, and whistle-blower provisions and protections? Would Waste Management have been as devastating if Arthur Andersen and management had not been so closely intertwined?

"I would like to think that the answers to these questions would be in the negative," said Sjoquist. Sarbanes-Oxley has concentrated the minds in the executive suite and the boardroom on greater and more transparent financial disclosure, on better corporate governance throughout the organization and on new relationships with accounting firms.

Also, she argued that while Sarbanes-Oxley provided the impetus for these initiatives, the pressure to do a...