Another Obscure Agency

One of the offshoots of Sarbanes-Oxley was the establishment of the Public Company Accounting Oversight Board. As you'd gather from the name, the board's role is to oversee the work of large auditing firms.

It turns out that some of the auditors have not done their job with regard to checking the reserves banks and other lending organizations have established for possible loan losses. This is really a key failure when auditing lending institutions. If loan loss reserves are too low, the institution will find itself in deep water.

The board found that some auditors did not even look at the loan reserves. Others did not understand or question the bank's rationale. Some did not verify the underlying data.

Again, another case of someone not doing their job.