Ace the AICPA Challenge 2025 – Master Your CPA Journey with Confidence!

The primary role of the Public Company Accounting Oversight Board (PCAOB) is to oversee the audits of public companies and protect investors. Established by the Sarbanes-Oxley Act of 2002, the PCAOB provides oversight for audit firms and establishes auditing standards to improve the reliability of public company financial statements. This is essential for maintaining investor confidence and ensuring the integrity of the financial reporting process. By setting rigorous standards and conducting inspections of audit firms, the PCAOB plays a critical role in safeguarding the interests of investors in the marketplace.

The other options, while related to accounting and auditing, do not accurately describe the PCAOB's mandate. Conducting audits for private companies and preparing financial statements fall outside its jurisdiction, as the PCAOB specifically focuses on public companies. Additionally, while the PCAOB addresses issues of quality in audits, it does not directly regulate individual CPAs' ethical practices, as this is typically managed by state boards of accountancy and professional associations.