The Securities and Exchange Commission (SEC) staff is preparing to assume the responsibilities of the Public Company Accounting Oversight Board (PCAOB) if Congress passes a budget reconciliation bill that eliminates the audit regulatory board, Acting Commission Chief Accountant Ryan Wolfe said at a financial reporting conference on June 11, 2025.
“I think from the staff perspective, where we’re assisting the commission, it’s important that we are thinking about these issues or monitoring them, and are prepared as the potential for these bills to move forward would result in the commission having new statutory responsibilities, specifically with respect to standard setting and inspections,” Wolfe said at the 43rd annual SEC & Financial Reporting Conference hosted by the Financial Executives International and the University of Southern California in Los Angeles.
“The enforcement authorities would also transfer, but we already have shared jurisdiction with respect to those activities,” Wolfe added.
The legislative provision was included by the House Financial Services Committee in the budget bill, which the House passed narrowly in May.
Folding the PCAOB’s work into the SEC would eliminate the accounting support fees that largely fund the audit board’s operations.
The Senate Banking Committee on June 6 also issued similar reconciliation language to eliminate the PCAOB, despite arguments that it would violate the so-called Byrd Rule, which limits the bill to only those changes necessary to align federal revenues and expenditures.
Wolfe said that the staff has been getting a lot of feedback about the legislative effort from various stakeholders.
“I would observe that one thing that I hear, I don’t want to say universally, but quite consistently, is on the importance for the overall ecosystem of the three major programs that the PCAOB engages in—being standard setting for auditors, inspections of auditors to evaluate the compliance with those standards, and similarly, the enforcement function,” said Wolfe, who also concurrently serves as the chief accountant of the SEC’s Division of Enforcement. Before being named interim chief accountant, he has been serving as the top accountant in enforcement.
“So, I think that these are incredibly important objectives that will continue regardless. And which is just to say, without providing any significant details, is that we’re aware of it and we are working on those issues,” Wolfe added.
In case Congress drops the provision, Wolfe said that his office—the Office of the Chief Accountant (OCA)—will continue with its work to assist the commission’s oversight of the PCAOB.
The SEC appoints the five PCAOB voting members, and the board’s standards and budget must be approved before taking they can go into effect.
While SEC officials have been saying that the commission will be able to take over the PCAOB’s work as long as it is funded to do so, the audit regulatory board has been emphasizing the importance of a dedicated, independent regulator to improve audit quality, as evidenced in the roughly two decades of existence.
For example, when Thomson Reuters asked PCAOB Chair Erica Williams at a recent conference about the SEC’s request to add $100 million to its fiscal 2026 budget in case the PCAOB’s work is incorporated, she responded: “we really do believe that every single member of the PCAOB staff is essential and they are irreplaceable…to drive audit quality.”
The PCAOB’s 2025 budget is $400 million.
This article originally appeared in the June 12, 2025, edition of Accounting & Compliance Alert, available on Checkpoint.
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