US audit watchdog remains intact after constitutional challenge
The US audit watchdog has survived a court challenge which threatened to
overturn the regulator landmark US legislation born out of the Enron scandal.
Under the ruling, handed down by the US Supreme Court yesterday, the audit
industry regulator, the Public Company Accounting Oversight Board (PCAOB), will
continue to operate, however its board members will be removable by the US
securities regulator “at will” rather than for “good cause”.
Critically, the 5-4 ruling keeps the board’s primary functions in tact and
allows it to continue operating. It was feared the board’s demise have opened
the door to new legislation which could include far ranging reform for auditors
and the financial services industry.
In a statement, PCAOB Acting Chairman Daniel Goelzer welcomed the decision.
“We are pleased that the decision allows the PCAOB to continue without
interruption to carry out its important mission of overseeing public company
audits in order to protect investors and promote the public interest,” he said.