US public auditing reforms may follow 2020
Tuesday, February 25, 2020
Subject
US public accounting oversight and proposed reforms.
Significance
Earlier this month, President Donald Trump released his budget proposal for the 2021 fiscal year. Among the proposals is merging the Public Company Accounting Oversight Board (PCAOB) into the Securities and Exchange Commission (SEC) beginning in 2022. The move would further weaken US securities law and the accounting framework, which has steadily eroded in recent years.
Impacts
- Shifting oversight over audit quality to the SEC would greatly reduce resources available for this function.
- House Democrats will be reluctant to give Trump legislative victories before November.
- Under Trump, the SEC will further shrink its enforcement activities; this process began before he became president.
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