Republican lawmakers back plan to dismantle PCAOB

A group of Republican legislators has supported a proposal to dissolve the Public Company Accounting Oversight Board (PCAOB), which supervises audits of firms listed on stock exchanges.

The Wall Street Journal reported that the initiative, endorsed by the Trump administration, would place these responsibilities under the Securities and Exchange Commission (SEC).

In a 30–22 party-line decision, the House Financial Services Committee approved the measure targeting the PCAOB.

The committee also backed legislation to trim funding for the Consumer Financial Protection Bureau.

These steps contribute to the development of a larger federal budget bill that awaits a vote in the House.

Over recent years, changes in White House leadership have led to shifts in PCAOB’s management.

The board, founded by Congress in response to major corporate frauds in the early 2000s, operates as a nonprofit with ties to the SEC.

Opponents of the PCAOB argue it imposes unnecessary costs on companies and replicates functions already carried out by the SEC.

On the other hand, many industry professionals caution this could diminish the quality of audit oversight.

The PCAOB currently employs nearly 500 individuals who handle inspections and coordinate with over 50 international authorities.

Critics warn the SEC would face significant delays in rebuilding this workforce and renegotiating international agreements.

The proposed integration would also result in changes to PCAOB salary structures.

If enacted, the shift of duties to the SEC would be completed within a year.

Board member salaries, which are currently not bound by federal pay limits, would be reduced. The PCAOB is funded through fees collected from public firms and brokerage houses.

These fees would be eliminated under the new plan, with the equivalent amount redirected to the US Treasury's general fund.

Earlier this week, the PCAOB provided lawmakers with technical input about the proposal in a letter sent to Representative Maxine Waters. She serves as the leading Democrat on the House Financial Services Committee.

PCAOB chair Erica Williams said: “Today, the PCAOB’s mission is as important as ever. History tells us that when the economy is tight, the risk of fraud goes up. And the stakes are high. “With millions of Americans invested in the stock market, including through 401(k)s and pensions, auditors need to perform their audits with more care than ever. Now is not the time for a major disruption in audit oversight.”

"Republican lawmakers back plan to dismantle PCAOB" was originally created and published by The Accountant, a GlobalData owned brand.