The former PCAOB czar joins a group of people that includes ex-SEC chairman Arthur Levitt, former PCAOB interim chairman Dan Goelzer, and others who say the Trump administration’s 2021 budget proposal to consolidate the duties of the audit regulator under the SEC starting in 2022 would be a big mistake.
In a blog that was published by Columbia Law School on Feb. 24, James Doty, who served as PCAOB chairman from 2011 to 2018, wrote that keeping the PCAOB as an independent entity, not as some division of the SEC, “is essential.”
President Donald Trump’s proposed $4.8 trillion budget calls for folding the Public Company Accounting Oversight Board (PCAOB), America’s audit watchdog, into the Securities and Exchange Commission, the nation’s primary financial regulator. The stated goal is to eliminate duplicative regulations and save money. It would do neither. Instead, it would send a harmful message that high quality audits are no longer a priority.
The Sarbanes-Oxley Act of 2002 established the PCAOB as a not-for-profit corporation whose mission is to inspect audits, establish audit standards, and enforce compliance with those standards. Sarbanes-Oxley was itself a bipartisan landmark, enacted in response to the accounting and auditing scandals at Enron, WorldCom and other public companies. The PCAOB is at the heart of that bipartisan spirit, and preserving its independence is essential.
You can read the rest of Doty’s blog post here. It’s a smidge over 950 words and the majority of it is him patting the PCAOB on the back for a job well done. But while the entirety of Doty’s blog will cause boredom, he at least went on record, predictably, about where he stands on this issue.
Hopefully Doty’s next blog post will be about what he thinks of the job current PCAOB Chairman William Duhnke is doing. I’m here for that.
How Congress Got It Right on Audit Oversight [CLS Blue Sky Blog]