The head of the U.S. audit regulator, the Public Company Accounting Oversight Board (PCAOB) — which was established in the wake of the Enron scandal to restore investor confidence — has agreed to step down amid political pressure to shutter the agency.
The chair of the PCAOB, Erika Williams, announced Wednesday that she will leave the agency on July 22.
Last October, Williams was appointed to a second term as chair, which was slated to run until 2029.
However, since the change in government in the U.S. — which resulted in the leadership being replaced at various federal regulators — there has also been a push to eliminate the PCAOB, and to hand its role to the U.S. Securities and Exchange Commission (SEC).
Earlier this year, Anthony Thompson, a member of the PCAOB’s board, warned of the potential consequences of curtailing the agency’s work.
“Over the past 20+ years, the PCAOB has expertly assisted in restoring trust in the U.S. capital markets. As many say, trust is hard to win, but easy to lose. We should seek to preserve the trust in our capital markets that the PCAOB has helped to rebuild,” he said.
Thompson also noted that, “There is considerable concern in the international community about the ripple effects of shuttering the PCAOB,” as it could disrupt the oversight of international issuers’ audits.
“If PCAOB inspections and investigations are disrupted here and abroad, investors could be harmed, and the trust in our capital markets that the PCAOB has worked diligently to support over the last two decades could be significantly eroded,” he said.
A provision to eliminate the PCAOB’s funding was included in an early version of the massive U.S. budget bill that was passed in early July, but that measure was ultimately cut from the bill as part of the Congressional reconciliation process.
Yet, while the agency survived, its leader is now leaving prematurely.
In a statement, Williams defended the importance of independent oversight of auditors and broker-dealer auditing to preserve confidence in the integrity of companies’ financial disclosures.
“With high economic uncertainty increasing the risk of fraud, the PCAOB’s mission is as important as ever. It’s critical the expert PCAOB staff continue to be empowered to carry out their work of ensuring American investors are protected,” she said.
“The PCAOB plays an essential role in protecting the investments and retirement savings of workers and families across the country while helping to ensure our capital markets remain the envy of the world,” she added.
In a statement, the SEC’s new chair Paul Atkins said, “Today I accepted Erica Williams’ offer to resign as chair and a board member of the PCAOB and thanked her for her service. I am grateful she has agreed to stay on until July 22nd. We look forward to advancing our oversight responsibilities of the PCAOB as it continues its important work.”