Would Coalfire Clients benefit from membership with the PCAOB?

April 28, 2015, Leslie Kaniecki, CPA/CGMA

Coalfire Controls, LLC (Coalfire) is a registered Certified Public Accounting (CPA) firm registered with the American Institute of Certified Public Accountants (AICPA) and the Colorado State Board of Accountancy, as required to issue Service Organization Control (SOC) attestation reports in accordance with AICPA Statements on Standards for Attestations and Engagements (SSAE).  However, Coalfire clients or prospects might wonder why Coalfire is not also registered with the Public Company Accounting Oversight Board (PCAOB). It raises the question: would Coalfire’s clients benefit from the firm’s membership with the PCAOB? 

The PCAOB is a non-profit organization created by congress in 2002 as part of the Sarbanes-Oxley Act for the protection and benefit of investors. The oversight strategic plan is designed to improve the quality of the audit provided by financial statement examiners of public traded companies that are part of the Security and Exchange Committee (SEC).  This oversight extends to registered CPA firms that provide opinions on audited financial statements to insure that they are accurate, informative and independent.  As Coalfire only issues SOC reports and provides no financial examinations or audit opinions on financial statements, Coalfire is not required to be a member.

Coalfire does comply with all requirements of the AICPA and recently completed their peer review validating that their auditors are completing SOC audits to the standards established by the ACIPA. The matter of PCAOB registration was not raised in the peer review, which means it was not considered relevant to the firm. In Coalfire’s directive for excellence, each auditor at Coalfire is expected to obtain additional certifications related to the technical testing of the IT controls, the technical knowledge base for designing IT systems related to the controls described, and tests of controls performed in the SOC report. So for the additional cost of membership, a second peer review and the administrative time associated with PCAOB membership would be a voluntary expense. These costs would eventually be passed on as an increase in fees, and therefore would not benefit Coalfire clients.

Leslie Kaniecki

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Leslie Kaniecki — CPA/CGMA

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