Dive Brief:
- Public Company Accounting Oversight Board Chair Erica Williams on Tuesday slammed a House Republican proposal to eliminate the agency and fold its duties into the Securities and Exchange Commission, saying she was “deeply troubled” by the legislation.
- The disruption to inspections of public accounting firms while a new program gets up and running could last years, Williams said at a PCAOB investor advisory group meeting in Washington.
- “We do not have to guess what could happen in the interim when no one is looking,” she said. “We already know from the accounting scandals of the early 2000s, from Enron and WorldCom, that brought us to where we are today. Investors lost billions of dollars in savings, workers lost their jobs and their retirement, and trust in our markets eroded.”
Dive Insight:
Under the draft legislation proposed by Republicans on the House Financial Services Committee, a levy on companies and broker dealers used to fund the Public Company Accounting Oversight Board would end, as previously reported by CFO Dive. Rules and processes currently overseen by the board would carry over into the SEC.
The Financial Services Committee is scheduled on Wednesday to consider winding down the PCAOB as part of a sweeping bill to fund the federal government. The effort reflects a broader push by the Trump administration and congressional Republicans to reduce regulation.
“The White House, eager to shrink the administrative state, likes the budget optics: scrapping the levy trims a visible fee and fits the broader narrative that independent agencies have accumulated too much unchecked power,” Neil Bass, founder and managing member at Bass Tax Group, a tax consulting firm in New Jersey, said in a Monday LinkedIn post.
The Sarbanes-Oxley Act of 2002 established the PCAOB to oversee the audits of public companies and registered broker-dealers. Under the act, the board is subject to SEC oversight, including the selection of its members.
Williams has stepped up PCAOB enforcement since taking the board’s top post in January 2022. She was appointed to a second term in June 2024.
“Our work is far from over, and today that work is as important as ever,” she said Tuesday.
