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Carmichael

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Article 1 - Carmichael Assignment (REVISED)
Group 15

QUESTION 1) WHO IS THE AUTHOR OF THIS PAPER AND WHAT IS HIS POSITION (GIVE DESCRIPTION OF RESPONSIBILITIES) WITH THE PCAOB AT THE TIME OF THIS ARTICLE.

The author of this paper is Douglas R. Carmichael. On April of 2003, Mr. Carmichael was appointed the first Chief Auditor and Director of Professional Standards for the Public Company Accounting Oversight Board. As such he was the primary advisor to the PCAOB on policy and technical issues relating to the auditing of public companies, including but not limited to auditing standards, registration, inspection, and thus enforcement of any mandates that are part of the Sarbanes-Oxley Act.

QUESTION 2) WHAT DOES CARMICHAEL SEE AS THE UNDERLYING MISSION OF THE PCAOB?

Carmichael views the underlying mission of the PCAOB to be the restoration of the public’s confidence in the auditor’s reports and findings. Accounting scandals, involving companies like Enron and WorldCom, prompted Congress to adopt the Sarbanes-Oxley Act as a means to establish control over accounting and auditing functions. A main focus of Sarbanes-Oxley was the establishment of the PCAOB. The PCAOB is a nongovernmental body, fully funded by fees collected by public and investment companies that benefit from independent audits. They are charged with overseeing the audit of public companies that are subject to SEC laws and related matters of the kind. Carmichael states that the confidence is not only to be earned by the accountants and auditors producing and reviewing the information, but also “by those who aspire to set the standards for auditors.”

QUESTION 3) ACCORDING TO CARMICHAEL, WHY IS IT SO IMPORTANT THAT THE PUBLIC HAVE CONFIDENCE IN THE INDEPENDENT AUDITORS OF PUBLIC COMPANIES?

Without public confidence in the independent audit process and the product thereof, there

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