A House Republican bill that would dissolve the PCAOB and fold its functions into the SEC became the subject of Big Four lobbying in fourth quarter 2021.
H.R. 5489, the Streamlining Public Company Accounting Oversight Act, was filed amid GOP protests over the SEC’s firing of PCAOB Chairman William Duhnke last year. The measure is sponsored by Rep. Bill Huizenga of Michigan, the ranking member of the House Financial Services Committee’s Subcommittee on Investor Protection, Entrepreneurship and Capital Markets.
Both Deloitte LLP and KPMG LLP listed the bill among their House, Senate, and SEC lobbying activity related to accounting matters on their Q4 lobbying disclosure forms, filed January 20 and January 11, 2022, respectively.
The forms do not disclose the firms’ positions on particular issues. Neither firm immediately responded to a request for comment.
The SEC under Gary Gensler in June 2021 fired Duhnke – to the cheers of progressive lawmakers and activists – and began seeking candidates for all five board seats. The commission in November named former SEC staffer and Kirkland & Ellis LLP Partner Erica Williams as the PCAOB’s next chair, along with Christina Ho, Kara Stein, and Anthony Thompson to fill out the rest of the board. Duane DesParte, who served as acting chair following Duhnke’s ouster, remained as a board member. All new members have since been sworn in by the SEC.
Duhnke, a longtime aide to Republican Sen. Richard Shelby, was named to head the audit regulator by the SEC under former Chairman Jay Clayton in 2017. His ouster is a continued source of anger among Republican lawmakers.
Huizenga filed the bill to eliminate the PCAOB on October 5, the same day as a Financial Services Committee hearing in which he confronted Gensler over Duhnke’s firing and accused the SEC of stonewalling on a GOP request for documents related to the decision. Huizenga told Gensler he had failed to give “a satisfactory explanation for removing Mr. Duhnke or your overhaul of the board.” (See House Republican Accuses SEC of Ignoring GOP Request for Materials on Duhnke Firing in the October 6, 2021, edition of Accounting & Compliance Alert.)
Huizenga’s bill would amend the Sarbanes-Oxley Act of 2002, which created the PCAOB, to establish a new Office of Public Accounting Oversight within the SEC Office of the Chief Accountant (OCA) – tasked with the same audit inspection, investigation and other oversight responsibilities as the PCAOB – and dissolve the audit regulator within two years of enactment.
The Q4 disclosures for the Big Four, AICPA, and Financial Accounting Foundation (FAF) otherwise largely tracked with the lobbying priorities of the prior quarter, which included such perennial topics as independence of accounting standard-setting and PCAOB enforcement transparency. (See Big Four, AIPCA Lobbying Includes FASB Independence, PCAOB Enforcement Transparency in the November 8, 2021, edition of Accounting & Compliance Alert.)
This article originally appeared in the January 31, 2022 edition of Accounting & Compliance Alert, available on Checkpoint.
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