A commissioner of the US Securities and
Exchange Commission (SEC) has objected to the appointment of a new
member of the Public Company Accounting Oversight Board (PCAOB)
member.
In an unusual public spat, Luis Aguilar has
spoken out against the appointment of Government Accountability
Office managing director Jeanette Franzel, who will replace
founding member Daniel Goelzer.
“My objection to this appointment is based on
the fact that the commission must appoint individuals who have
‘demonstrated commitment to the interests of investors’,” Aguilar
said. “This is not the case here.”
The SEC oversees the PCAOB and appoints its
members. Aguilar said Franzel’s appointment to the five-member
board is at a critical juncture for the PCAOB, which will vote on
important audit proposals aimed to enhance the transparency and
independence of audits. It is predicted Franzel could have a
casting vote on the proposals.
“The success of these projects will require a
board fully committed to investors as the owners of public
companies, the providers of capital and the primary beneficiaries
of financial statements,” Aguilar said.
Aguilar said he reached his conclusion after
reviewing other candidates’ records and by speaking to investors,
academics and members of US Congress who supported the appointment
of an investor advocate.
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By GlobalDataThe composition of the PCAOB board has caused
conflict in the past as investor advocates have long pushed for the
two CPA positions to be filled by accountants with a track record
of promoting investor interests.
When announcing Franzel’s appointment on
Friday, SEC chairman Mary Schapiro said: “Jeanette’s commitment to
the public trust and America’s investors is demonstrated by her
life-long public service and her constant dedication to increasing
accountability, audit quality and audit standards”.
The Sarbanes-Oxley Act of 2002 created the
PCAOB to provide independent oversight of audits of public
companies and broker-dealers. The board is responsible for setting
auditing standards and for registering, inspecting and disciplining
public accounting firms.
