Public Company Accounting Oversight Board (PCAOB) member Christina Ho, speaking at a conference last week, highlighted that a legislative proposal to eliminate the audit regulatory board could have some advantages. This perspective contrasts with that of some academics, former regulators, investor advocates, and even PCAOB Chair Erica Williams who have focused solely on the negative consequences of such a move.
“The first thing to remember is… the provision is not to get rid of audit oversight. This is specifically about moving the oversight function to SEC, and every model has pros and cons. Certainly, to make a move like that will have impact on people, on process, on system, and also on the overall regulated environment. So, it does require some thoughtful execution of that,” she said.
“But I will say there are a couple of unique things that I think will present as opportunities,” Ho said at the 43rd annual SEC & Financial Reporting Conference hosted by the Financial Executives International and the University of Southern California in Los Angeles on June 12, 2025.
“When you think about audit quality, you cannot assess audit quality outside of the context of the reliability of the financial statements. In the current model, the reliability of financial statements, that assessment and oversight is at the SEC,” she explained.
In contrast, the audit oversight at the PCAOB is focused more on the auditing process, she said. Thus, the audit standards are all process related.
“I think that if you have a bifurcated environment, sometimes audit quality becomes more audit process quality,” Ho said. “And I think if you can merge the two, it can definitely benefit to have a more holistic picture of audit quality. And I think that benefit investors.”
Ho explained that her views are based on her experience as a former public company auditor, controller, and interim chief financial officer. She was also a regulator as an official at the Department of Treasury where she led a transfer of functions from one bureau to another.
Further, she noted that the SEC already oversees the PCAOB. The commission appoints its five voting members, approves the board’s yearly budget, and needs to sign off on audit standard changes before they can become effect.
“And so SEC has purview, and they have the people and the expertise already to oversee us and also auditor as well,” she said.
The legislative provision included in a larger budget bill that was passed by a slim margin by the House of Representatives. The Senate will also consider a similar provision in the budget reconciliation bill that President Trump wants completed in the next few weeks.
This article originally appeared in the June 16, 2025, edition of Accounting & Compliance Alert, available on Checkpoint.
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