Third, both management and the auditor are responsible for reporting the effectiveness of the company’s internal control over financial reporting. That responsibility is required by the Sarbanes-Oxley Act. In order to make sure they will execute responsibility, PCAOB issued an auditing standard to regulate this area of the auditor’s responsibilities.
At last, the Public Company Accounting Oversight Board (PCAOB) set up the Sarbanes-Oxley Act. It ended long period of self-regulation by accounting profession. That is a good way for accounting practice which improved the quality by making examination recommendations instead of by taking punishment actions. That is also good for auditing firm or an individual auditor to act in a good faith and to establish a good image to the public and the clients.