The Accounting Policy & Practice Report ® provides financial accounting policy makers, advisors, and practitioners with the latest news, expert insights, and guidance on emerging, evolving,...
Two bi-partisan senators have revived their efforts to end the secrecy surrounding PCAOB disciplinary proceedings, arguing that the legislation is necessary to give the public and investors timely, critical information.
Senate Bill 610— PCAOB Enforcement Transparency Act of 2017—is at least the third attempt by Sens. Jack Reed (D-R.I.) and Chuck Grassley (R-Iowa) to introduce such legislation. They last introduced a bill in April 2015, following efforts in 2013 and 2011. Grassley is on the Finance Committee, which has jurisdiction over the PCAOB. Reed is on the Banking Committee, which also has jurisdiction.
Currently the PCAOB’s hearings are nonpublic, through final appeal to the SEC. The Sarbanes-Oxley Act requires the PCAOB’s disciplinary hearings to be nonpublic, unless the board finds good cause for a hearing to be public and each party consents to public hearings.
PCAOB Chairman James R. Doty told Bloomberg BNA, in a Mar. 21 email, “I appreciate the continued support of Chairman Grassley and Senator Reed to bring transparency to litigated PCAOB enforcement proceedings to better protect investors.”
The revived law would bring the Public Company Accounting Oversight Board into alignment with public enforcement proceedings of other regulators, including the Securities and Exchange Commission.
Chip Unruh from Reed’s office, responding to a question as to why this version of a bill would succeed, where others have failed, told Bloomberg BNA Mar. 21 that there is “a new Chairman of the Banking Committee and he has expressed an interest in moving bipartisan, effective legislation. " Mike Crapo (R-Idaho) is Chairman of the Senate Committee on Banking, Housing and Urban Affairs, Sherrod Brown (D-Ohio) is Ranking Member. Unruh said they planned to “continue to work with Chairman Crapo and Ranking Member Brown and our colleagues as they consider future bills.”
Unruh said that he was unaware of support for a companion bill in the House.
“Transparency brings accountability,” Grassley said in a Mar. 21 release. “The secrecy provides incentives to bad actors to extend the proceedings as long as possible so they can continue to do business without notice to businesses about potential problems with a particular auditor.”
Reed said, “Investors and companies alike should be aware when the auditors and accountants they rely on have been charged or sanctioned for violating professional auditing standards.”
As Doty testified in 2012 testimony at earlier effort to make disciplinary proceedings public, auditors and audit firms charged with violating the laws " have little incentive to consent to opening the case against them to public view, and in fact, none have ever done so.”
Bloomberg BNA could not get a response from an auditor on whether allowing the PCAOB’s allegations to be made public early on would unfairly damage the auditor’s reputation.
To contact the reporter on this story: Laura Tieger Salisbury in Washington at LSalisbury@bna.com
To contact the editor responsible for this story: S. Ali Sartipzadeh at email@example.com
Information on the S 610 PCAOB Enforcement Transparency Act of 2017 is at https://www.congress.gov/bill/115th-congress/senate-bill/610
Copyright © 2017 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)