As of April 1, 2013, 2,374 public accounting firms, including U.S. firms and non-U.S. firms, are registered with the PCAOB. The PCAOB conducts regular, periodic inspections of hundreds of those firms, but not all of those firms. It should not be assumed or expected that a firm registered with the PCAOB is, or necessarily will be, inspected by the PCAOB.
The Sarbanes-Oxley Act authorizes the PCAOB to inspect registered firms for the purpose of assessing compliance with certain laws, rules, and professional standards in connection with a firm's audit work for clients that are "issuers," as that term is defined in the Act,* and (following amendments to the Act in 2010) a firm's audit work for clients that are securities brokers or dealers. Many PCAOB-registered firms perform no such work, and the work they do perform is not within the scope of the PCAOB's statutory responsibility and authority to assess. The PCAOB does not inspect those firms.
There are a variety of reasons that firms that perform no audit work for issuers, brokers, or dealers might register with the PCAOB. Some regulators have adopted rules requiring persons subject to their jurisdiction to use PCAOB-registered firms for specified services unrelated to audits of issuers, brokers, or dealers. In addition, firms that currently do no audit work for issuers, brokers, or dealers might register with the PCAOB just to be in a better position to compete for future business for which registration is required.
The PCAOB regularly inspects those firms that issue audit reports opining on the financial statements of issuers. The actual number of firms that the PCAOB regularly inspects fluctuates since certain registered firms cease to issue audit opinions while other firms will begin to issue audit reports for the first time. In general, the PCAOB inspects each firm in this category either annually or triennially, depending upon whether the firm provides audit reports for more than 100 issuers (annual inspection) or 100 or fewer issuers (triennial inspection). At any time, the PCAOB might also inspect any other registered firm that plays a role in the audit of an issuer, and the PCAOB has a practice of inspecting, in each year, some firms in that category. The PCAOB began conducting inspections of registered firms' audits of brokers and dealers in 2011.