PCAOB OKs charters for advisory groups

The Public Company Accounting Oversight Board approved charters for the membership and activities to revive its old Investor Advisory Group and set up a new Standards and Emerging Issues Advisory Group.

The vote Tuesday by the PCAOB comes after the board under its old leadership stopped holding meetings of the outside advisory groups in 2018. After the ouster of former PCAOB chair William Duhnke and two other board members last year by the Securities and Exchange Commission — in part because of complaints that the PCAOB wasn’t meeting regularly with outside stakeholders — the reformed board announced it would revive the advisory groups. The Investor Advisory Group now has a new charter, and the former Standing Advisory Group has been renamed the Standards and Emerging Issues Advisory Group and also given a new charter. The PCAOB had proposed initial frameworks for the charters back in January and asked for public comments (see story). It also opened nominations for members of the groups at that time, but the nominations closed on Feb. 28.

“Advisory groups provide an important forum for stakeholders to engage with the PCAOB and share their perspectives on our oversight activities,” said PCAOB chair Erica Williams in a statement Tuesday. “With the adoption of IAG and SEIAG charters, we have a solid structure in place to foster a regular and robust dialogue with representatives from all stakeholders, including the investor community, audit committees, and preparers and auditors of financial statements.”

Courtesy of the PCAOB

The Investor Advisory Group will advise the PCAOB on issues pertaining to the PCAOB’s mission to oversee the audit of companies that are subject to the securities laws, and related matters, in order to protect the interests of investors and further the public interest in the preparation of informative, accurate and independent audit reports, including investors’ perspectives on key areas of concern and potential emerging issues related to the PCAOB’s oversight activities.

The SEIAG will advise the PCAOB on existing standards, proposed standards, potential new standards and on matters other than standards, such as emerging issues, that are of significance to the PCAOB to protect the interests of investors and further the public interest in the preparation of informative, accurate and independent audit reports.

Along with approving charters for the new advisory groups, the PCAOB also voted Tuesday to dissolve the Standards Advisory Group, which had been established in March 2021 but never formally met.

The PCAOB plans to announce the names of those appointed to the new advisory groups shortly, along with the dates for both groups’ initial meetings.