The Public Company Accounting Oversight Board (PCAOB) will hold a public meeting on July 20, 2026, to consider issuing a proposed strategic plan for 2026-2030.
The draft goals and objectives for the next five years will be based on feedback, including 71 comment letters the board has received in response to a March 31 request for comment on seven broad questions regarding the PCAOB’s strategic priorities.
It is unclear what the draft long-term plan will contain. But the PCAOB’s strategic plan will include recommendations by Securities and Exchange Commission (SEC) Chief Accountant Kurt Hohl who has publicly articulated what he wants the board to do to modernize its operations and functions in an evolving environment.
The SEC oversees the PCAOB.
Audit firms urge inspection and standard-setting changes
Big Four firms, the AICPA’s Auditing Standards Board (ASB), and the Center for Audit Quality (CAQ) appear to back what Hohl and subsequently PCAOB Chairman Demetrios Logothetis have been saying about the direction the board should take.
For example, they support the board’s effort to put greater emphasis on a firm’s system of quality control for its inspections program, which was previously articulated by Hohl and Logothetis. To this end, the PCAOB recently named members to the Inspections Modernization Council.
They also want the PCAOB to use standards written by the International Auditing and Assurance Standards Board (IAASB) as the foundation for new and revised PCAOB standards, taking into account jurisdictional differences.
The IAASB’s International Standards of Auditing “serves as the baseline for most of the firm’s audit methodology,” Hohl said during a webinar hosted by the CAQ on July 13. “It’s the baseline for the AICPA’s auditing standards here that are used in the U.S. so that is a very, very important part of our financial reporting environment, and for the PCAOB and the IAASB… to work closely together to reduce the gap between the two.”
He noted that the differences between the two standards are not significant, but they add costs to the marketplace and potentially confuse investors about what standards are being applied to companies.
“So we’re working very closely with the PCAOB staff and the IAASB to coordinate standard-setting activities so that they are closely aligned with one another,” Hohl said.
The AICPA said alignment would reduce unnecessary complexity, fragmentation, implementation risk, execution risk, and burdens on firms and auditors who apply multiple sets of standards.
The ASB, as part of its goal, has been converging its standards with those issued by the IAASB, as appropriate, and it could provide “useful insights for the PCAOB as it considers its standard-setting process going forward.” The ASB writes auditing standards for private companies.
Chamber of Commerce seeks process reforms and withdrawal of NOCLAR
The U.S. Chamber of Commerce said the PCAOB should prioritize improving the standard-setting process, recalibrating inspections and enforcement, deploying artificial intelligence (AI) responsibly, encouraging small business, setting reasonable standards, and fostering competition.
This is especially important as the previous board, in its view, rushed against “artificial deadlines” to issue new standards and rules. It called on the PCAOB to return to a more reasonable and predictable cadence, with comment periods of at least 90 days and longer periods when multiple standards are proposed in rapid succession.
The Chamber again called for the PCAOB to withdraw its proposed noncompliance with laws and regulations (NOCLAR), saying it had “structural and policy flaws.” Companies and their auditors were up in arms when the board worked on the project during Erica Williams’ tenure as chair of the PCAOB. She’s the immediate predecessor to Logothetis.
The PCAOB did set NOCLAR aside shortly after Donald Trump was elected President in November 2024. Separately however, the PCAOB is accepting comments on its standard-setting and research agendas until August 7.
On enforcement, the Chamber said the PCAOB should focus on clear, intentional violations of PCAOB standards that lead to demonstrable investor harm. It also urged coordination with the SEC to avoid duplicative enforcement and a “piling-on effect.”
Investor advocates
The members of the PCAOB Investor Advisory Group (MIAG), an important stakeholder as the board’s only mission is to protect investors, emphasized that the board must maintain a dedicated investor advisory group that is responsive to investor concerns and distinct from the Standards and Emerging Issues Advisory Group (SEIAG).
“Overall, it is critical for the new board members to prioritize the needs of investors and continue to obtain their perspectives,” the MIAG said.
On inspections and enforcement, the MIAG recommended that the PCAOB determine measures to evaluate the effectiveness of those activities, conduct evaluations based on those measures, and report the results publicly in an accessible manner.
Unlike the firms which fully endorsed a focus on quality control aspects for the inspections program, the MIAG said it agrees with PCAOB member George Botic’s views that the change should be carried out following careful consideration.
“Representing the investor perspective, the MIAG shares Botic’s concerns about reducing the number of audit workpapers inspected and the resulting reduction in frequency and transparency of the publication of inspection findings,” the MIAG wrote. “We generally believe that any future consideration of reducing the number of audit workpapers inspected should be conditioned upon the firms’ first demonstrating over a reasonable period the implementation of robust, effective firm-wide audit quality controls.”
The Council of Institutional Investors (CII), whose general counsel Jeffrey Mahoney is a member of both the IAG and SEIAG, said the PCAOB should continue to focus on investor protection, transparency, accountability, and independent oversight.
Mahoney, who has led the IAG’s call for improved critical audit matters (CAMs), reiterated 2023 recommendations that the PCAOB revise the standard to make the disclosures more useful.
Better Markets also urged the PCAOB to maintain rigorous rule-setting, inspections, and enforcement. It raised concerns about a shift toward firm-wide quality management review rather than engagement-level review and said a focus solely on quality control would be misguided.
The reform group also expressed concern about declining SEC and PCAOB enforcement activity and called for continued enforcement involving ethics failures and exam cheating.
Jack Ciesielski, president of R.G. Associates, Inc. and a former member of the IAG, said the PCAOB should adopt an investor-centered approach, focusing on providing investors with more useful, transparent, and comparable information about audit quality. He stresses that investor protection should come through better information and oversight, not by reducing regulatory scrutiny.
Senator Warren
In the meantime, Senator Elizabeth Warren (D-MA), a ranking member of the Senate Banking Committee, wrote a letter to PCAOB Chairman Logothetis expressing concern that recent actions by the Trump Administration and SEC could weaken investor protections and undermine the integrity of U.S. capital markets.
Warren said that the SEC has significantly reduced enforcement activity, while budget cuts and leadership changes at the PCAOB threaten its independence and effectiveness.
“As the SEC dramatically cuts its enforcement efforts, ignores corporate misconduct, and abdicates its responsibility to meaningfully police the capital markets, the role of public company auditors—and their regulator, the PCAOB—is even more critical to ensuring investor protection and protecting market integrity,” she wrote. “As the PCAOB develops its strategic priorities for the next five years, it must keep in mind its own mission to ‘protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports.'”
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