The French audit regulator has expressed concerns over the potential dismantling of its US counterpart, the Public Company Accounting Oversight Board (PCAOB), citing “damaging consequences”, reported Reuters, which saw a letter.
This warning comes as US lawmakers debate legislation that could eliminate the PCAOB, transferring its responsibilities to the Securities and Exchange Commission (SEC).
The PCAOB, established in 2002 following accounting scandals, plays a crucial role in overseeing public company audits.
Florence Peybernes, president of France’s High Authority of Auditing (H2A), highlighted the potential jeopardy to coordination between H2A and its US counterpart if Congress proceeds with its plan.
Peybernes’ concerns echo similar warnings from German audit regulators.
The PCAOB currently holds agreements with European Union regulators, which would need renegotiation if its responsibilities shift to the SEC.
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By GlobalDataPeybernes anticipates significant disruptions during this transition, even if regulators manage to resolve these issues.
PCAOB chair Erica Williams has also cautioned against eliminating the PCAOB, emphasising the importance of audit oversight for investors.
In a letter to Congresswoman Maxine Waters, Williams stated, “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.”
SEC Chairman Paul Atkins recently indicated the SEC’s readiness to assume PCAOB functions, requesting a $100m budget buffer for potential new responsibilities.
However, an SEC spokesperson declined further comment. While some Republicans criticise the PCAOB as costly, advocates highlight its role in improving financial reporting standards.
