The Public Company Accounting Oversight Board (PCAOB) is digging deep into the lives of those who audit public companies, going so far as to require disclosure of criminal background from staff, some of whom don’t even work on audits.
KPMG, Deloitte and Ernst & Young told AccountancyAge.com that information about their employees’ criminal backgrounds has been requested as part of ongoing inspections the Board is conducting of the Big Four public accounting firms. Other firms are also being asked to provide the information.
PCAOB rules state that staff do not have to reveal motor vehicle crimes, but must come clean on anything else, including drug offenses. The PCAOB isn’t interested in this information from staff whose duties are deemed to be clerical. However, senior staff not involved in audits, even marketing professionals, have said they were surprised to be asked for this information, AccountancyAge.com reported.
The Board has made it clear it expects compliance from all "associated persons," but insisted only those involved with audits have to submit the information.
A requirement that all staff sign the requested forms by hand was dropped when it became clear it would create an administrative nightmare.
All accounting firms that audit publicly held companies have been required to register with the PCAOB. Some of the largest firms will pay more than $300,000 to register.