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Climate Risk Scorecard

Assessment Key
Significant ProgressSignificant Progress
Some ProgressSome Progress
No ProgressNo Progress
Not ApplicableNot Applicable

Public Company Accounting Oversight Board

Other Agency Scorecards:
About the Public Company Accounting Oversight Board

The Public Company Accounting Oversight Board (PCAOB) is a nonprofit corporation established by Congress in 2002 to oversee the then-self-regulated audit profession following the financial crisis and numerous accounting frauds at large public companies and audit firms. The PCAOB oversees accounting professionals who audit publicly traded companies, as well as brokers and dealers registered with the Securities and Exchange Commission (SEC), in order to protect investors and further the public interest by providing accurate and independent audit reports. To this same end, the PCAOB establishes auditing and related attestation, quality control, ethics, and independence standards for these auditors.  

The PCAOB registers public accounting firms and inspects those registrants’ audits and quality control systems. It also has the power to investigate and discipline registered accounting firms and their auditors for violations of PCAOB rules and standards. In support of its mission, it conducts economic research and risk analysis, and engages with stakeholders and other domestic and international regulators. 

Each of these authorities is subject to oversight and approval by the SEC, including the Board's rules, standards, and budget. PCAOB-regulated entities and individuals may appeal Board decisions to the SEC, which has the power to modify and overturn those rules and decisions.  

The PCAOB’s stated goal of protecting investors’ interest in high quality audits warrants auditors’ review of climate-related financial risk. Investors are increasingly looking for climate-related disclosures, and it is widely understood that firms are at increasing climate-related physical and transition risk. Auditors must be aware of, understand, and review climate-related disclosures to ensure data provided by companies they audit is accurate and appropriately reflects the company’s risk. Global counterparts including the Financial Accounting Standards Board and International Auditing and Assurance Standards Board have already issued educational papers and guidance. As the standard-setter for U.S. auditors, the PCAOB must develop auditor guidance for assurance on sustainability and climate risk reporting, equipping investors with information about uncertainties and judgements on the impact of climate risk on a company’s financial statements and business strategy.  

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