The House Financial Services Committee is considering draft legislation that would transfer the responsibilities of the Public Company Accounting Oversight Board to the Securities and Exchange Commission.
The bill would also end the accounting support fees that public companies and broker-dealers pay to fund the PCAOB. "The proposal would transfer the authorities of the PCAOB to the SEC," said a spokesperson for the committee. "It modifies PCAOB's authority to collect and spend accounting support fees and directs fees to be remitted to Treasury." The PCAOB did not immediately respond to a request for comment.
The bill might be included in the larger tax and spending reconciliation bill that's currently making its way through Congress, according to the
Under the draft legislation, all intellectual property retained by the PCAOB in support of its programs for registration, standard-setting and inspection would be shared with the SEC and any pending enforcement and disciplinary actions of the Board would be referred to the SEC or other regulators in accordance with Section 105 of the Sarbanes-Oxley Act of 2002.
The Sarbanes-Oxley Act originally established the PCAOB in response to a wave of accounting scandals in the early 2000s involving Enron, WorldCom and other companies.
Effectively on the transfer date from the PCAOB to the SEC, all unobligated fees collected under Section 109(d) of the Sarbanes-Oxley Act would be transferred to the general fund of the Treasury, and the SEC would not be able to collect fees under that section. The duties and powers of the PCAOB in effect as of the day before the transfer date, other than those described in Section 107 of Sarbanes-Oxley, would be transferred to the SEC. That section already grants the SEC general oversight of the PCAOB and the power to review the Board's actions, including general modification and rescission of Board authority.
The draft legislation says, however, the SEC may not use funds to carry out Section 107 of Sarbanes-Oxley Act for activities related to overseeing the Board. The PCAOB would have to transfer all intellectual property to the SEC, along with existing processes and regulations of the Board, including existing PCAOB auditing standards. Those would continue in effect unless they were modified through rulemaking by the SEC; and any reference to the PCAOB in any law, regulation, document, record, map or other paper of the United States would be deemed to be a reference to the SEC.
Any PCAOB employee as of the date of enactment of the bill may be offered equivalent positions on the SEC staff, as determined by the Commission, and submit to the Commission's standard employment policies; and receive pay no higher than the highest paid employee of similarly situated employees of the Commission, according to the draft legislation. That provision could in effect lower the salaries of PCAOB board members, who are some of the highest paid employees in the federal government. In 2023, PCAOB chair Erica Williams earned $672,676, while other members will be paid almost $546,891, according to SEC chair Hester Peirce, a Republican member of the commission who criticized the PCAOB's "
