What does the PCAOB set standards for?

The Public Company Accounting Oversight Board (PCAOB) was established in 2002 as a result of the Sarbanes-Oxley Act. Its primary role is to oversee the audits of public companies to ensure that they comply with applicable laws and accounting standards. The PCAOB sets auditing standards specifically for public companies, addressing how audits should be performed to protect the interests of investors and the public by promoting informative, accurate, and independent audit reports.

This focus on public companies distinguishes the PCAOB from organizations that regulate other types of entities, like non-profit organizations or government entities. Non-profits, for example, are often governed by different regulations and auditing standards that are tailored to their unique financial structures and reporting requirements. Similarly, government entities adhere to standards set by entities like the Government Accountability Office (GAO) and the Federal Accounting Standards Advisory Board (FASAB). Local businesses, on the other hand, may not be subject to the same rigorous oversight as public companies and generally rely on state and local laws for their regulation, often without PCAOB involvement.