PCAOB and SEC: Possible Merger by 2022?
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Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski and I’m back once again with Ryan Istre, an Audit Director and one of the faces of our PKF Texas SEC team. Ryan, welcome back to The Playbook.
Ryan: Thanks, Jen.
Jen: Recently, one of our industry publications, Accounting Today, had an article where it said the PCAOB may fold into the SEC by 2022? What’s going on there?
Ryan: Yes, I did read that in Accounting Today. Right now, it’s a White House budget blueprint. The proposal is for, you know, for budgeting purposes, of course, to potentially save the country $580 million by the year 2030.
Ryan: The PCAOB and the SEC are technically separate bodies right now. The SEC is responsible for the stability of our capital markets by oversight of a public company registrants. The PCAOB is responsible for audit quality, so it comes in and it reviews audit work papers and audit processes that firms who are registered with the PCAOB follow.
Jen: What would this mean to audit clients in the public company space?
Ryan: No one knows yet. Again, this is very preliminary. It’s literally just a budget proposal blueprint, so no one really knows if this is likely to occur, what is the ramifications if it does occur. In my opinion, it could create some synergies in the way the PCAOB and SEC works. For example, while the corporation finance staff of the SEC will review public company filings on a regular basis and specialty filings; for example, registration statements; whereas, the PCAOB will come in, as I mentioned earlier, and on a triannual basis, review our audit files to ensure we are performing, we and every other CPA firm in the country that’s registered with the PCAOB, are performing quality audits. In my opinion, presumably, there would be some synergies to be gained from this folding in of the PCAOB to the SEC, but who knows? It’s the government. You never really know what’s going on. Jen: So, we’ll just stay tuned then.
Ryan: Stay tuned.
Jen: All right, well, we will get you back to talk more about public companies. Sound good?
Jen: For more information about public company topics, visit PKFTexas.com/SECdesk. This has been another Thought Leader Production, brought to you by PKF Texas – The Entrepreneur’s Playbook. Tune in next week for another chapter.