| Course | ACC 640 Auditing |
|---|---|
| Module | Module 1 |
| Paper type | graduate discussion post on audit oversight and the PCAOB |
| Length | About 340 words, 3 pages |
| Format | APA 7 student paper |
| School | Southern New Hampshire University |
| Program | MS Accounting |
| Updated | October 2026 |
Free sample paper for ACC 640 Module 1
Module One Discussion
The Inspector in the Next Room
Our firm has just been engaged to audit an outdoor apparel and gear company in Oregon after its previous auditor resigned. The partner's first planning comment was that a new public company client with a recent auditor change is the kind of engagement the PCAOB likes to select for inspection. That comment captures how much oversight now shapes the work.
Before 2002, audit firms were overseen mainly by peer review, in which firms reviewed each other under AICPA programs. After the collapses of Enron and WorldCom and the failure of Arthur Andersen, Congress concluded self-regulation had not worked and created the PCAOB in the Sarbanes-Oxley Act, under SEC oversight. The board registers firms that audit public companies, writes the auditing, ethics and quality control rules those audits must follow, inspects firms, annually for the largest and every three years for smaller ones, and can sanction firms and individuals.
Inspections differ from peer review in who looks and how. PCAOB staff, not competitors, select engagements based on risk, often revenue, estimates and internal control, and report deficiencies publicly, with quality control criticisms made public if not fixed within a year. Lennox and Pittman (2010) studied what changed when inspections replaced peer review and questioned how much the public reports told clients about firm quality. The evidence on effects is more encouraging: DeFond and Lennox (2017) found that after inspections criticized firms' internal control audits, those firms reported more material weaknesses, suggesting inspections pushed auditors to be tougher. DeFond and Zhang (2014) caution in their review that audit quality is hard to measure, so conclusions about any reform should be modest.
My view is that oversight has improved discipline in the areas inspectors target, which is why our planning for this client will document judgments on revenue and the returns reserve with an inspector in mind.
For classmates: should the chance of a PCAOB inspection change how an audit team plans its work, or should a well-planned audit look the same whether or not anyone checks?
References
DeFond, M. L., & Lennox, C. S. (2017). Do PCAOB inspections improve the quality of internal control audits? Journal of Accounting Research, 55(3), 591-627. https://doi.org/10.1111/1475-679X.12151
DeFond, M., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2-3), 275-326. https://doi.org/10.1016/j.jacceco.2014.09.002
Lennox, C., & Pittman, J. (2010). Auditing the auditors: Evidence on the recent reforms to the external monitoring of audit firms. Journal of Accounting and Economics, 49(1-2), 84-103. https://doi.org/10.1016/j.jacceco.2009.04.002
What the ACC 640 Module 1 instructions ask for
The first ACC 640 discussion usually asks about the environment public company auditors work in: the Sarbanes-Oxley Act, the PCAOB's standard-setting, inspection and enforcement roles, the SEC's oversight and how this differs from private company audits under AICPA standards. Plan on three or four paragraphs drawing on the standards, the textbook and research, and then reply to classmates. Good graduate posts go beyond describing the PCAOB to evaluating whether oversight improves audit quality and explaining how it affects decisions on a real engagement. Some prompts ask about auditor independence or the expectations gap, which fit the same structure of rule, purpose and evidence. A short example from a real or illustrative client keeps the post from reading like a summary.
How this ACC 640 Module 1 discussion example is built
The post starts with an audit firm preparing to audit an Oregon outdoor apparel company for the first time and knowing the engagement may be selected for inspection. It explains that the PCAOB was created by the Sarbanes-Oxley Act after audit failures at Enron and WorldCom ended the profession's self-regulation through peer review. It describes the board's three roles, standards, inspections and enforcement, and notes that inspections focus on high-risk areas such as revenue and estimates. It cites Lennox and Pittman on the shift from peer review, DeFond and Lennox on inspections and internal control audits, and DeFond and Zhang's review, then asks classmates how inspection risk should shape the plan for a first-year client with a recent auditor change.
Where the ACC 640 Module 1 rubric puts the points
Scoring for the oversight discussion typically weighs accuracy on the PCAOB's creation and roles, the comparison with prior self-regulation, use of research on audit quality and engagement with classmates. Graduate-level posts take a position on whether oversight works and support it with evidence, rather than only describing the structure. Posts that confuse the PCAOB with the SEC or the AICPA, or that claim inspections certify individual audits, score lower. Replies that connect a classmate's point to a specific audit area, such as estimates or revenue, earn more participation credit than general agreement. Precise references to the Sarbanes-Oxley Act's sections and to PCAOB standards add depth, as does a clear statement of what the evidence can and cannot show.
ACC 640 Module 1 help: the mistakes that cost points
Students sometimes describe PCAOB inspections as reviews of a company's financial statements, when they review the audit firm's work and quality control. Others assume the PCAOB sets accounting standards, which remains the FASB's role. If your prompt is about independence or the AICPA's Auditing Standards Board instead, organize it around the rule maker, its purpose and its effect. Mention one specific area that inspections often target, such as auditing estimates; it shows you understand how oversight reaches the work papers, and it gives classmates something concrete to respond to. A position, stated plainly, makes the replies livelier.
Get ACC 640 Module 1 written to your instructions
Send the ACC 640 Module 1 prompt. The post will explain the oversight framework accurately, connect it to a concrete engagement and support its position with research, ending with a question for replies. Plan on roughly two days; your first costs nothing. The paper above is an original model document written by our desk, not a submitted student paper and not an official Southern New Hampshire University document.
More ACC 640 papers and related MS Accounting samples
- ACC 640 Module 2 Client Acceptance Assignment: Taking Over After a Resignation
- ACC 550 Module 7 Milestone Three: A Flexible Budget for the Shelling Season
- ACC 620 Module 7 Discussion: Restatement or Revision for a Small Error?
- MBA 687 Module 1 Correspondence on a Failed Change
- MBA 580 Module 8 Final Innovation Strategy Proposal
ACC 640 Module 1 questions, answered
Where can I find a free ACC 640 Module 1 Discussion sample?
This page includes the full ACC 640 Module 1 post on PCAOB oversight and whether inspections improve audit quality.
Why was the PCAOB created?
The Sarbanes-Oxley Act of 2002 created it after major audit failures to oversee auditors of public companies, replacing the profession's self-regulation through peer review.
What are the PCAOB's main roles?
Registering audit firms, setting auditing, quality control, ethics and independence standards for public company audits, inspecting registered firms and enforcing compliance.
Do PCAOB standards apply to private company audits?
No. Audits of private companies follow the AICPA's generally accepted auditing standards, set by its Auditing Standards Board.
Do PCAOB inspections improve audit quality?
Research finds some evidence that they do, for example more rigorous internal control audits after inspection findings, though measuring audit quality is difficult.