Dive Brief:
- The Securities and Exchange Commission has removed William Duhnke from the Public Company Accounting Oversight Board (PCAOB) and designated Duane DesParte acting chairperson, effective immediately, the agency has announced.
- PCAOB was established in 2002 to oversee financial statement audits of public companies and brokers and dealers.
- "The PCAOB has an opportunity to live up to Congress's vision," SEC Chair Gary Gensler said in a statement.
Dive Insight:
DesParte has been a PCAOB member since early 2018. He joined the board after retiring from Exelon Corporation, where he served as corporate controller and in other financial roles for 15 years, following an 18-year career in the audit assurance profession.
"I am honored to work with the SEC and the staff of the PCAOB as acting chair to ensure that we meet the mission established by Congress," DesParte said in a statement.
Duhnke, a Trump administration appointee who, before he was named PCAOB chair in 2017, was staff director of the U.S. Senate Committee on Rules and Administration when it was chaired by Richard Shelby (R-Ala.).
Duhnke has been the subject of criticism by investor advocates and others, including former PCAOB advisors, for taking steps they viewed as increasing risks.
“These failures [by PCAOB] increase risks to our financial system and require immediate attention,” the former advisors said in a letter to the SEC in April.
Critics also took issue with a proposal last year to fold PCAOB into the SEC and make its function part of the SEC's mission.
The board has never been considered a strong regulator. A review of its actions released late last year found that, out of more than 800 incidences in which the board found audit problems, fewer than 20 of them resulted in enforcement actions, and audit firms were fined only about $8 million.
"I look forward to working with my fellow commissioners, Acting Chair DesParte, and the staff of the PCAOB to set it on a path to better protect investors by ensuring that public company audits are informative, accurate, and independent," Gensler said.
