Any publicly traded company with international ambitions should be familiar with two governing bodies in order remain compliant through all business dealings and to report accurately to avoid scrutiny and audits.
The Public Company Accounting Oversight Board, or PCAOB, is a nonprofit organization that was set up by the U.S. Congress to be an overseer of public companies, providing auditing services to ensure that the interests of investors and the general public are protected through in-depth, professional, and completely independent auditing. Essentially, they’re an independent third party that oversees the auditing of large, public companies. Additionally, the PCAOB also oversees the audits of broker-dealers, including compliance reports, to protect investors.
Created largely as a response to the many publicly followed accounting scandals involving huge, formerly trusted public companies like Enron and WorldCom, the PCAOB has become the people’s watchdog in ensuring that public companies are all held to the same standard of integrity and financial responsibility. It is non-biased and unaffiliated with any other organization and committed to enforcing the law and restoring confidence in the big names of business.
Responsible for making and implementing far-reaching laws and regulations that affect international trade in all 28 nations of the European Union, the European Commission (EC) is the executive governing body of the European Union. EU nations agree to adhere to a universal set of laws and regulations that govern how they interact with one another and the world, particularly in economic and political matters. These regulations have a profound impact on businesses within the EU.
Essentially, the PCAOB and the EC are two forms of the same organization. The PCAOB ensures accountability and responsibility for countries operating within the United States and those from other nations that do business within the U.S., and the EC assumes responsibility for European Markets.
How Do These Organizations Operate?
Unfortunately, neither the PCAOB nor the EC can instantly sniff out a company and tell whether it is reporting honestly or not. So how do they ensure universal compliance and integrity? By enforcing a great deal of regulations, reporting rules, and targeted audits across the board for all public company. What this means for organizations is that businesses must become familiar with and prepared for all compliance regulations for the PCAOB within the U.S. and the EU for any dealings with Europe.
How Do They Interact?
Over the past few years, the EU and the PCAOB have developed a closer relationship as they work together to ensure compliance by public companies and to protect investors and the general public. Leaders of the two organizations work together to act as regulators and ensure that the key goals of auditing oversight are met and exceeded.
One example of how these organizations work together is in the oversight of non-U.S. firms that audit public U.S. companies. Since this special case falls in the jurisdiction of both organizations, the two work together to ensure compliance.
What Does This All Mean For You?
How can you ensure that your business is always compliant in following regulations, accurate in all financial reporting, and prepared in the possible event of an audit? One powerful way to accomplish each of these critical goals is to implement a digital document management system (DMS). This cutting-edge but simple-to-use software allows you to digitize all of your company’s documents in an organized and highly secure database. Why should you go paperless with your documents on your way to becoming compliant? Here are just a few reasons.
Organize and Instantly Search Documents
Each physical document that you scan will be scanned for text and symbols, meaning you’re doing much more than saving an image of a document to a database—you’re essentially creating an identical digital text document that will be fully searchable. That means you’ll always have any document available for reporting or even audits, ensuring that you can always be compliant at a moment’s notice.
Automate Document Retention
You no longer need to worry about overflowing physical filing cabinets and keeping track of which documents must be kept and which can be thrown away. With a DMS, managing documents over long periods of time is incredibly simple and stress-free, so you never have to lose sleep over wondering whether you’ve trashed a document that will someday become critical in an audit or report.
Once you’ve saved documents to a DMS database, they can be tagged with specific information and metadata to customize the search process, allowing you to quickly narrow search results and find what you’re looking for in little time.
To find out more about how a powerful document management system can transform your company’s ability meet compliance standards and reporting accurately, fill out the form on this page and start a free 15-minute demo of eFileCabinet’s document management system.