WASHINGTON, D.C.—Amanda Fischer, Policy Director and Chief Operating Officer, issued the following statement in connection with Better Markets’ new Fact Sheet, “The Dangers of Folding the PCAOB Into the SEC.”
“Congress’s proposal to abolish the Public Company Accounting Oversight Board (PCAOB) and fold it into the Securities and Exchange Commission (SEC) is dangerous and misguided. It is especially concerning that lawmakers would propose abolishing the PCAOB at a time when the stock market is experiencing tremendous amounts of volatility. Investors need access to quality financial information now more than ever. When markets are in crisis, firms may be more incented to use accounting tricks to smooth over volatility and make their firms look healthier than they really are. With investors already fearing what may happen to their savings, now is not the time to abolish the dedicated Board entrusted with ensuring that rigorous and quality audit inspections take place.
“It is important to remember that abolishing the PCAOB and transferring its functions to the SEC won’t accrue real savings. The PCAOB is paid for by fees on the audit industry and the firms it audits – not taxpayers. Folding the functions of the PCAOB into the SEC would also not make auditing oversight more efficient. Because the SEC does not have the personnel to review accounting firms’ auditing work, it would have to hire essentially the same people who now work at the PCAOB. So Congress’s proposal would not save taxpayers money and might even cost money.
“Five years ago, the White House similarly proposed that the SEC absorb the functions of the PCAOB. That proposal was not adopted, due in large part to concerns that it would weaken oversight of large auditing firms. There is no reason to reach a different conclusion now.”
The Fact Sheet is available here.
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
