New Securities and Exchange Commission (SEC) Chair Paul Atkins said that the commission would be able to oversee public company auditors if Congress decides to consolidate the Public Company Accounting Oversight Board’s (PCAOB) functions into the commission, as part of efforts to streamline the federal government and reduce spending.
“Congress outsourced those tasks to the PCAOB, and it’s up to Congress to decide where they should be housed. And if they were decided to be merged into the SEC, I think we could handle it and be able to have enough people in the funding to accomplish it because, at least the way the bill is structured, they have thought about that,” Atkins told reporters at the SEC Speaks 2025 conference in Washington on May 19.
When asked if the SEC could do so under its current funding, Atkins said no.
But the bill as contemplated by Congress “sounds like we would have the funding, and we could get the people who are at the PCAOB and be able to consolidate,” he said. “So, I am sure that can be accomplished.”
Critics are not so sure.
“Talk is cheap in DC, and not to be trusted,” said Lynn Turner, a former SEC Chief Accountant who also served on the PCAOB’s advisory groups told Thomson Reuters. “Coming up with the money and talent in the current environment is highly doubtful.”
Six former PCAOB members also expressed concern in a May 8 letter to lawmakers about the congressional proposal. They argue that eliminating the PCAOB would be a mistake, as its audit inspections have significantly improved audit quality, reducing financial restatements since 2003.
“We are skeptical that the SEC could replicate the PCAOB’s expertise and infrastructure with similar positive results,” according to the letter signed by former PCAOB chair James Doty and founding PCAOB founding members Kayla Gillan, Daniel Goelzer, and Bill Gradison, as well as board members Steven Harris and Lewis Ferguson.
They noted that the PCAOB focuses solely on auditor oversight, while the SEC has numerous responsibilities. Adding auditor oversight could dilute both this function and the SEC’s ability to fulfill its investor protection mission.
They warned that even if the SEC could eventually recreate the PCAOB’s functions, it would take years, causing disruption and lack of continuity.
Currently, the SEC oversees the PCAOB without investing its limited resources in daily auditor oversight, a model they believe works well.
Budget reconciliation text for fiscal 2025 advanced by the House Financial Services Committee states that while the PCAOB’s functions would transfer, the SEC would not be able to collect accounting support fees, which the PCAOB currently collects from issuers and broker-dealers to fund its operations.
The SEC’s budget is approximately $2 billion, though exact figures are unclear due to a 15% staff reduction following buyouts under the Trump administration’s goals to downsize the federal government through the Department of Government Efficiency. This led to delayed or canceled services and low morale.
In contrast, the PCAOB’s budget has grown, with a 2025 spending plan of $400 million. Critics, including PCAOB member Christina Ho and Republican-appointed SEC Commissioners Hester Peirce and Mark Uyeda, have opposed the board’s increasing budget. Under the Sarbanes-Oxley Act of 2002, the PCAOB’s budget requires SEC approval.
Democratic SEC Commissioner Caroline Crenshaw, who also spoke at the conference told reporters that the decision ultimately lies with Congress.
“But I think they would need to think through a lot of things, and I think the PCAOB plays a really important role that the SEC does not currently play or have the tools to do certain things, things like examining for audit papers in China, things like that,” she said. “So that’s certainly something I would think that the Congress would want to” think through.
When asked if the SEC could take on the PCAOB’s work, Crenshaw responded that if Congress is “willing to appropriate us, then we might if they chose to do that. But at our current appropriation levels, I don’t think that we probably would.”
In the meantime, no matter what happens in Congress, things are likely to change at the PCAOB.
The exact changes are not clear as Atkins still has to hire his staff, division heads, and he’s coming up to speed on a myriad of issues that the commission tackles.
He told reporters that he has talked to PCAOB Chair Erica Williams. But when asked about any regulatory priorities he has discussed with her, he responded: “We didn’t really talk substances.”
This article originally appeared in the May 20, 2025, edition of Accounting & Compliance Alert, available on Checkpoint.
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