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While most of us were busy watching the SEC adopt climate disclosure rules, the PCAOB held its previously announced roundtable on its controversial NOCLAR proposal. According to a statement on the event issued by the Center for Audit Quality, it didn’t go very well:

Transparency and accountability are pillars of effective public policy development. Unfortunately, the roundtable that the PCAOB held this week on its proposal related to company noncompliance with laws and regulations (NOCLAR) failed to live up to these principles. Specifically, the roundtable failed to address the concerns outlined in 78% of the comment letters the PCAOB received, including from those investors, audit committee members, auditors, academics and others who are concerned with the PCAOB’s proposal.

“Today’s NOCLAR roundtable was a missed opportunity for the PCAOB to further understand the views highlighted in numerous comment letters from engaged stakeholders,” said Julie Bell Lindsay, Chief Executive Officer, CAQ. “Not only did the roundtable surface disagreement as to the actual scope or intention of the proposal, but we are concerned that the lack of diverse stakeholder representation – particularly from investors and audit committees, two important audiences – resulted in dialogue that did not meaningfully address stakeholder concerns. Given the discussion at the roundtable, we believe that the appropriate response is to re-propose the standard, with an economic analysis, to begin to address these concerns.”

If you don’t want to take the CAQ’s word for it, a replay of the roundtable is available on the PCAOB’s website.

We’ve previously blogged about the comments on the proposal from investor groups, representatives of the accounting profession and the ABA’s Business Law Section. While some investor groups are supportive of the proposal, the business community & the accounting and legal professions have a lot of concerns about its implications. Those concerns are shared by some key members of Congress, and this roundtable was held in response to pressure from lawmakers. As Liz blogged last month, the PCAOB also reopened the comment period through March 18, 2024, so stay tuned.

– John Jenkins