PCAOB Chairman James R. Doty sees the audit profession as being at a turning point, not just in the U.S., but globally. One of Doty’s greatest priorities is gaining access to China to conduct inspections of PCAOB-registered firms. He said that meaningful progress was made at the May 9 U.S.-China Strategic and Economic Dialogue that took place in Washington. He said it is in China’s interest as an economic power and a participant in the world economy to have the assurance that joint inspections bring to the markets.

Questions:

1. Doty led the team that represented the Board before the Supreme Court in last year’s Constitutional challenge.  Briefly explain what that was all about, why it was important, and the outcome.

2. Doty said that constituents want the audit report to go beyond the traditional binary report of either clean or qualified. What is another term for a clean audit opinion? Explain briefly what these constituents want.

3. Explain the importance of his work with China for the business field and accounting profession. Include in your answer issues about the reluctance from China.
Source:

Lamoreaux, M. (2011). PCAOB Set to Expand Under New Mandates, Journal of Accountancy (Retrievable online at http://www.journalofaccountancy.com/Issues/2011/Jul/20113954.htm)

Youtube video (2011). SEC Investigations Impeded.