Now that the Securities and Exchange Commission (SEC) is seeking candidates to serve as Public Company Accounting Oversight Board (PCAOB) members, it begs the question: Will the commission clean house at the audit regulatory board?
Even though an SEC spokesperson confirmed that current PCAOB members are eligible to apply, recent history suggests that most, if not all, will be replaced by new faces later this year. As part of its oversight activities, the SEC appoints and removes five voting members of the PCAOB and approves the board’s yearly budget and rule changes.
“I hope that the SEC will retain at least one of the current board members, rather than replacing the whole board, as occurred at the start of the first Trump administration and the Biden administration,” said Daniel Goezler, a founding PCAOB member.
Less Political in the Past
While it is almost impossible to take politics out of an organization—especially in Washington—it was not always the case that the entire board would be replaced with each new administration. It was also customary for board members to receive second terms.
That changed, as Goelzer points out, when Jay Clayton cleaned house in December 2017. Just as Clayton rolled back rules, the PCAOB took a lighter approach to audit regulation during William Duhnke’s tenure during the first Trump administration.
Then during the Biden administration, SEC Chair Gary Gensler fired Duhnke and appointed Erica Williams as chair and replaced other board members. Just as Gensler pursued an aggressive regulatory agenda at the SEC, Williams did the same at the PCAOB.
Another change from prior norms during the first Trump presidency was the turnover among division heads at the PCAOB. While such changes have been common at the SEC, they were not always the norm at the board. Once Duhnke became PCAOB chair, he replaced division heads.
Now with Trump in the White House the second time in 2025, SEC Chair Paul Atkins has continued this practice by pushing Williams out and is seeking candidates to serve on the PCAOB.
Goelzer: Not Congressional Intent
While many are betting that the SEC will eventually appoint all five new members, critics question whether this serves the public’s interest.
“Some continuity would be useful, of course. So would some dissenting views,” said Jack Ciesielski, founder of R.G. Associates, Inc. who served on a PCAOB advisory group. “I’m not sure we’ll get either one.”
Goelzer pointed out that when the PCAOB was established through the Sarbanes-Oxley Act of 2002, Congress didn’t intend for wholesale change of PCAOB members whenever SEC leadership changed. The law was passed in response to accounting scandals at companies like Enron and WorldCom.
“Paul Atkins may want to make significant changes in the board’s priorities, but I think that there would be benefits to maintaining some board-level continuity and institutional memory,” he said.
Still, Goelzer agreed with Ciesielski, predicting that the SEC will replace all current board members: Acting Chair George Botic, members Christina Ho, Kara Stein, and Anthony Thompson.
While Atkins may be adhering to the new practice, Goelzer also wondered if the SEC chief will inadvertently start a new trend that may not serve the public interest.
“In the past, these have been regarded as attractive positions, in part because of the salary, and there has been a lot of interest in them. There isn’t much political incentive to retain board members appointed by the prior SEC administration,” he said. “The same dynamic will likely apply this time, although the combination of a possible salary reduction and uncertainty about the board’s future could reduce the number of people seeking a board seat.”
Goelzer was referring to Atkins’ statement about the need to review the PCAOB’s budget, including board member salaries, which he has always viewed as inflated.
It is likely that the board’s budget and compensation will be cut, as the Trump administration has pushed for government-wide streamlining. While the PCAOB is not a government entity, it is still a regulator overseen by a government agency, and the SEC has not been spared in that broad effort.
Moreover, there are plenty of lawmakers who wanted to shut the PCAOB down as part of government-wide cost savings even if the Senate ultimately decided that the board should continue to exist.
In the meantime, there is also speculation that not all board members will be replaced.
Richard Chambers, senior adviser for risk and audit at AuditBoard, previously said that Stein and Thompson, who have reliably voted with Williams, will likely be replaced. However, Ho, whose regulatory views are similar to those of Atkins, could still be reappointed.
Take your tax and accounting research to the next level with Checkpoint Edge and CoCounsel. Get instant access to AI-assisted research, expert-approved answers, and cutting-edge tools like Advisory Maps and State Charts. Try it today and transform the way you work! Subscribe now and discover a smarter way to find answers.
