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During his first tour of duty as an SEC commissioner, Paul Atkins was not known for his warm and fuzzy feelings toward the PCOAB.  Now, as he prepares to assume the position of SEC Chair, it looks like critics of the agency are likely to have his ear, and the implications for the PCAOB could be significant. Here’s an excerpt from a recent Wall Street Journal article:

New leadership likely would scale back the PCAOB’s reach, leading to fewer penalties, slower rule making and a smaller budget, PCAOB observers say. A long-gestating debate over whether the SEC should absorb the PCAOB is poised to resurface, they say.

Atkins, while an SEC commissioner, criticized the PCAOB’s budget, saying salaries paid to board members were disproportionately high. In speeches, he spoke out against rules that limited audit firms’ ability to make professional judgments. “Overly prescriptive standards can rob you of the ability to apply your professional judgment,” Atkins said in 2005.

The board members’ annual salaries have been flat since 2009, with the chair receiving nearly $673,000 and the other members receiving almost $547,000.

Atkins as commissioner showed disdain for the PCAOB when meeting with officials from the audit regulator, said Martin Baumann, an adjunct accounting professor at Southern New Hampshire University and former PCAOB chief auditor. “I don’t expect this to be good for the PCAOB,” he said, referring to Trump’s Atkins pick.

The possibility that the PCAOB may ultimately be on the chopping block shouldn’t come as a surprise. Eliminating the PCAOB was one of the securities regulation reforms specifically called out in the Project 2025 document I blogged about last month. However, that kind of a move would require Congress to act, since the PCAOB was created by Sarbanes-Oxley.

On the other hand, despite her recent appointment to a second term, PCAOB Chair Erica Williams might want to dust off her resume.  The WSJ article suggests that she may be replaced, and it wouldn’t be the first time that the SEC has cleaned house at the PCAOB after a change in administrations. Also, I’m guessing that it’s not a good sign that Google is already identifying her as the “former chairperson” of the PCAOB.

– John Jenkins