Is This the End of the PCAOB?

The 2025 budget reconciliation bill, which passed the House of Representatives on May 22, includes a provision that would abolish the Public Company Accounting Oversight Board and transfer its functions to the Securities and Exchange Commission.  The House Financial Services Committee added the PCAOB elimination provision to the budget bill during an April 30 markup.  There have been no Congressional hearings on the issue of folding the PCAOB into the SEC, and neither the Administration nor the SEC has publicly recommended dissolving the Board.  Abolishing the PCAOB was, however, one of the recommendations of Project 2025, the Heritage Foundation’s plan to reshape the federal government.

The concurrent resolution on the budget for fiscal year 2025 (officially titled the One Big Beautiful Bill Act) is must-pass legislation for the Administration.  It includes many provisions that would implement the President’s priorities, particularly as to taxation and spending. The bill is now before the Senate, and it is not clear whether the section terminating the PCAOB will survive.  However, considering the magnitude of other issues inherent in the budget reconciliation process, the PCAOB’s fate is unlikely to receive much attention in the overall legislative debate and negotiation.

In a May 1 speech at Baruch College, PCAOB Chair Erica Williams strongly defended the Board’s record and said that she was “deeply troubled” by legislation to eliminate the PCAOB as we know it.”  Six former PCAOB Board members sent a letter to the House Financial Services and Budget committees opposing abolition of the PCAOB and warning that doing so “risks great harm to our capital markets and to the investors and companies that rely on the integrity of the financial reporting that underpins those markets.”  See also Save the PCAOB! (Dan Goelzer blog post on medium.com, May 4, 2025).