Playing Peekaboo with Constitutional Law: The PCAOB and its Public/Private Status

99 Pages Posted: 19 Nov 2004 Last revised: 1 Aug 2009

See all articles by Donna M. Nagy

Donna M. Nagy

Indiana University Maurer School of Law

Date Written: July 10, 2009


This Article is the first to consider the constitutional status of the Public Company Accounting Oversight Board (PCAOB - pronounced by some as peekaboo). Congress created the PCAOB in 2002 to regulate the accounting profession in response to scandals at Enron, WorldCom, and other public companies. The Article argues that notwithstanding the PCAOB's congressional designation as a nonprofit corporation in the private sector, its governmental creation, governmental objectives, governmental powers, and governmentally appointed board members render it a public (or state) actor for purposes of constitutional law. The Article also analyzes the PCAOB from a policy perspective, and argues that the public/private PCAOB stands in tension with democratic values such as accountability, transparency, and legitimacy, and that inefficiencies result from its ambiguous status. It concludes with a discussion of legislation pending in Congress that would establish a Mutual Fund Oversight Board, and recommends that even if the PCAOB's status remains unchanged, Congress should not create any other public/private regulators modeled after the PCAOB.

Keywords: PCAOB, state action, accounting, federal government corporations, Sarbanes-Oxley

JEL Classification: K22

Suggested Citation

Nagy, Donna M., Playing Peekaboo with Constitutional Law: The PCAOB and its Public/Private Status (July 10, 2009). Notre Dame Law Review, Vol. 80, pp. 975-1071, 2005, U of Cincinnati Public Law Research Paper No. 04-10, Indiana Legal Studies Research Paper Series, Available at SSRN:

Donna M. Nagy (Contact Author)

Indiana University Maurer School of Law ( email )

211 S. Indiana Avenue
Bloomington, IN 47405
United States

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