Accounting Oversight Boards Proposes Flexible Reporting Option
Board Chairman William McDonough told MarketWatch the proposal should give companies an opportunity to offer investors “added assurance” about their accounting practices, noting that a number of companies have disclosed material weaknesses during this year’s reporting season. But board member Daniel Goelzer said it would be unfortunate if the board’s proposal became a permanent requirement on companies.
“It seems to me that, in most cases, investors should be able to accept management’s assurance that it has remediated a weakness without the added support of an interim auditor’s opinion,” Goelzer to MarketWatch.
Section 404 of the Sarbanes-OxleyAct of 2002 Requires auditors to report on companies’ internal control over financial reporting. Companies are required to report whether they have any “material weaknesses” in controls. The PCAOB was established by the Sarbanes-Oxley Act to oversee the auditors of public companies.