What organization is empowered to set auditing standards for public companies in the US?

The Public Company Accounting Oversight Board (PCAOB) is the organization that has the authority to establish auditing standards for public companies in the United States. Created in response to the accounting scandals of the early 2000s, the PCAOB ensures that audit practices are rigorously applied and upheld to protect investors and maintain confidence in the financial reporting process.

The PCAOB oversees the audits of public companies and therefore plays a crucial role in setting standards that ensure the integrity and quality of those audits. This is essential for the accountability of financial information presented by publicly traded entities.

The other organizations mentioned play different roles in the landscape of financial reporting and auditing; for example, the Financial Accounting Standards Board (FASB) focuses on setting accounting standards rather than auditing standards. The Securities and Exchange Commission (SEC) regulates the securities industry and ensures compliance with federal securities laws but does not establish specific auditing standards. The International Accounting Standards Board (IASB) develops international accounting standards, which are not specific to the U.S. public companies.

Thus, the PCAOB is uniquely positioned to create and enforce auditing standards, making it the correct choice.