Who Is Required to Have a PCAOB Audit?

Not all audits are built the same. In parallel, not every business falls under the same set of rules. Once a company steps into public markets or registers with the SEC, the type of audit required shifts significantly. At that point, it’s no longer just about compliance—it becomes a legal mandate. This is where PCAOB audits enter the picture.

But who is required to have a PCAOB Audit?

PCAOB Audit Obligations

PCAOB audits are not optional for specific types of entities. Such audits follow PCAOB audit standards, which apply under federal law to the categories listed below:

1- Public Companies Listed on U.S. Stock Exchanges

SEC-registered firms trading on NASDAQ or NYSE are obligated to obtain PCAOB-compliant audits.

2- Companies Preparing for an IPO

Businesses planning to go public, including SPACs, are required to fulfill audit requirements for public companies—meaning a PCAOB-registered firm should be engaged.

3- Broker-Dealers Registered with the SEC

All broker-dealers should file annual reports that are subject to PCAOB audit standards, not GAAS.

4- Certain Foreign Private Issuers

If listed in the U.S., foreign issuers still must file PCAOB-audited financials, despite their non-domestic operations.

5- Subsidiaries of Public Companies

Even if the entity itself is private, if it belongs to a public parent, a PCAOB audit may be triggered in accordance with the reporting obligations.

Distinction Matters

The line drawn between PCAOB vs GAAS is not just a technical one—it is rooted in legal and investor-facing obligations. Audits under PCAOB rules include enhanced oversight on internal controls and risk procedures that standard GAAS audits do not.

When evaluating PCAOB vs US GAAP, the roles also differ. US GAAP governs how financials are prepared. On the other side, PCAOB audit standards simply determine how those financials are tested for accuracy. So, asking how is a PCAOB audit different from a normal audit becomes more than academic—it defines whether the entity is in line with regulatory expectations.

Takeaway for Growing Enterprises

If the company is in early discussions with investors or drafting SEC filings, it is vital to recognize whether PCAOB oversight applies. The audit requirements for public companies do not leave room for flexibility. Working with a firm that is not PCAOB-registered simply is not permitted.

The rules are straightforward. If the company plans to touch public capital in any form, the audit must follow PCAOB standards. No workarounds exist. It is better to know this early and prepare accordingly. For further assistance, contact Dimov Audit today.