PCAOB Guidance Undercuts Auditor Independence

Washington, D.C. – CFA, AFL-CIO, Better Markets, Center for American Progress, and Americans for Financial Reform wrote to SEC Chairman Jay Clayton calling on him to require the Public Company Accounting Oversight Board (PCAOB) to withdraw staff guidance issued earlier this year that would undermine both enforcement of auditor independence rules and transparency regarding independence rule violations. Not only would investors not be informed when independence violations occurred, they would be misled by statements falsely affirming that the audit was conducted in compliance with PCAOB standards when that was not the case. The letter also criticizes the PCAOB for adopting this major policy change through an opaque and closed process that did not provide an opportunity for public input.