PCAOB: Is it Constitutional or Not?

Abstract

The Public Company Accounting Oversight Board (PCAOB) is a private-sector, non-profit corporation, created by the Sarbanes-Oxley Act of 2002, to oversee the auditors of public companies to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports.

Recently, the Board is faced with a case filed by Free Enterprise Fund regarding the separation of powers principles and Appointment Clause by the Constitution. This paper hopes to shed light on what would be the outcome and implication of the case on the Board’s existence as an effective auditing regulatory body.

Keywords: PCAOB, SEC, Sarbanes-Oxley Act, Appointment Clause, audit, internal control, issuer, audit report, auditing standard, audit risks, investors, unconstitutional