The development of the PCAOB was one of the most significant components of the Sarbanes-Oxley Act of 2002. Go to the PCAOB's web site, www.pcaobus.org and answer the following questions.
a. Identify the responsibilities of the PCAOB as described in the web site. How does the inspection process performed by the PCAOB likely affect the practice of external auditing?
b. The PCAOB can have no more than two CPAs among its five members. Read the biographies of the current board members and note which have the CPA designation. What might be the rationale for such a requirement? What are the advantages and disadvantages of the limitation concerning CPA members on the board?
c. Do the auditing standards set by the PCAOB apply to audits of nonpublic companies? Explain.