Under the Sarbanes-Oxley Act, which statement is true regarding the PCAOB?

The Public Company Accounting Oversight Board (PCAOB) was established as part of the Sarbanes-Oxley Act to oversee the audits of public companies and ensure the accuracy and reliability of financial reporting. One of the fundamental aspects of the PCAOB's authority is its ability to engage in legal actions.

The correct statement indicates that the PCAOB can sue and be sued in any U.S. court with the approval of the Securities and Exchange Commission (SEC). This is important because it underscores the PCAOB’s role as a regulatory body with the necessary legal standing to enforce compliance and take action against individuals or firms that violate laws related to accounting practices. The requirement for SEC approval before initiating a lawsuit is a mechanism designed to ensure that the PCAOB operates within the bounds of its regulatory framework and adheres to established protocols, thus maintaining an orderly process in legal matters.

This authority empowers the PCAOB to effectively carry out its mission of protecting investors and maintaining the integrity of the financial reporting process, which is vital for public confidence in the capital markets.