Call on Audit Board to Control Efforts Against Deceptive Marketing

TLDR:

• CPAs urge the Public Company Accounting Oversight Board (PCAOB) to scale back a proposal aimed at preventing firms from misleading marketing of their registration.
• The proposal is criticized for setting the bar for enforcement actions too low and exposing firms to legal liability.

Key Elements:

CPAs have pressured the PCAOB to revise a proposal that aims to prevent firms from falsely marketing their registration with the regulator as an endorsement of their work. The bar for possible enforcement actions is considered too low, and some believe the rules should target clear cases where a firm promotes registration with PCAOB as a seal of approval. Firms that highlight their registration with the PCAOB in a proof of reserves report have faced scrutiny for potential misleading of investors. The proposal also aims to end firms from using their connection with the PCAOB as a marketing tool, especially for those firms with poor inspection records.

Concerns have been raised by various groups, including Grant Thornton LLP, KPMG LLP, Illinois CPA Society, US Chamber of Commerce, and others, regarding the broad scope of the proposal, potential conflicts with other regulatory requirements, and the need for greater transparency and education about PCAOB registration and enforcement work.