SEC Overhauls PCAOB Amid Audit Industry Concerns
Atkins Overhaul of the PCAOB
SEC Chair Paul Atkins has announced a refresh of all five seats of the Public Company Accounting Oversight Board (PCAOB), marking the third time the regulator has seen a restructuring in the last ten years, once under SEC Chair Jay Claton and for a second time under SEC Chair Gary Gensler.
Impact to investors:
The politicization of the “audit-industry watchdog” has raised concerns within the audit industry and investors who question this decision’s effects on audit quality, institutional memory, and independent standard-setting.
Recent attacks:
The PCAOB faced strong crosswinds this past spring when Republicans in Congress tried to terminate the corporation altogether. While the PCAOB survived, some voices are suggesting for the board to grant its enforcement power to the SEC and hand off standard-setting to downsize the power of the group.
Calling for stability: The Center for Audit Quality, a trade group for audit firms, stated, “As the PCAOB enters a period of transition with new leadership, dedication to the mission and expertise in audit and assurance will be important, particularly in a rapidly evolving marketplace.”
What We Are Watching This Week
In the Senate:
A bipartisan piece of housing legislation has been introduced by Senate Banking Chair Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA). The bill, Renewing Opportunity in the American Dream to Housing Act of 2025, aims to increase the supply of affordable housing in the US by improving access, preserving supply, and boosting oversight of housing programs. This bill would raise the investment cap for banks from 15 to 20% for community investment and economic development. The bill is scheduled for markup on Tuesday.
In Florida:
Attorney General Jame Uthmeier has issued subpoenas to investigate potential state consumer protection and antitrust violations by CDP and the Sciences Based Targets Initiative (SBTi). Uthmeier stated “Florida will not sit back while international pressure groups shake down American companies to fund their ESG grift. We’re using every tool of the law to stop the Climate Cartel from exploiting businesses and misleading consumers.”