The PCAOB Revives its Advisory Committees
The Public Company Accounting Oversight Board has announced the creation of two new advisory groups — the Investor Advisory Group (IAG) and the Standards and Emerging Issues Advisory Group (SEIAG) – and is seeking nominations for the membership in each group. According to the Board’s January 31 press release, the SEIAG will “advise the PCAOB on existing standards, proposed standards, potential new standards and, if requested by the Board, on matters other than standards that are of significance to the PCAOB, including emerging audit issues.” The Investor Advisory Group will “advise the PCAOB on matters concerning the PCAOB’s mission to oversee the audits of public companies, and related matters (such as the audits of broker-dealers), to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports, including providing investors’ perspectives on key areas of concern and potential emerging risks related to PCAOB oversight activities.” The PCAOB has issued a Request for Public Comment that describes the SEIAG and IAG in more detail and invites views on draft governance frameworks for each, including purpose and role, membership selection, size, composition, member terms, leadership and agenda setting, meeting and overall structure, and observers.
The PCAOB previously maintained two similar advisory groups, but neither has met since 2018. The Board’s announcement essentially revives these two bodies, although with some differences in mission and composition. PCAOB Chair Erica Y. Williams stated: “Building on the success of the PCAOB’s past advisory groups, the IAG and SEIAG will provide us with opportunities to obtain key views and insights from regular engagement with stakeholders.”
The 24-member SEIAG is intended to include, along with other perspectives, audit committee members. The Request for Public Comment states that the Board will seek to include the following areas of expertise on the SEIAG: accounting (including financial reporting), auditing, corporate finance, corporate governance (including audit committees or boards of directors), investing in public companies, and other areas that the Board deems relevant. Regarding advisory group composition, Ms. Williams stated: “The effectiveness of our oversight depends on robust dialogue with key stakeholders, including the investor community, audit committee members, preparers and auditors of financial statements, and academics, among others.”
The deadline for comments and for advisory group nominations is February 28. The PCAOB has released two forms for submitting nominations, the Nominator Form to nominate someone else to serve on the SEIAG, IAG, or both, and the Nominee Form to submit a self-nomination.