Dive Brief:

• Public Company Accounting Oversight Board member Christina Ho called for “common sense” audit regulation by future members of the audit watchdog’s board in a statement on Tuesday announcing she would not seek reappointment.
• Ho, whose term ended Oct. 24, informed the agency on Monday that she intended to step down, and will leave the audit watchdog effective Jan. 31, or when the Securities and Exchange Commission appoints a successor, according to a Tuesday press release.  
• “I am optimistic that the SEC will appoint highly qualified individuals to serve on the board,” Ho said in a statement regarding her decision to step down. “It is my hope that they will be committed to common sense audit regulation, fostering resilience in the audit marketplace and promoting innovation. These priorities are essential for protecting investors and strengthening our capital markets.”

Dive Insight:

Ho was sworn in as a PCAOB member in November 2021. During her time on the board — created in 2002 after large-scale accounting scandals at Enron and Worldcom — she served as chair of its technology working group, helping to draft strategic recommendations for its response to emerging technologies such as artificial intelligence, according to her statement.

“I take great pride in my contributions during my tenure, particularly in serving as a credible lone dissenter who was able to prevent the adoption of some potentially harmful standards and rules,” Ho said in the statement.

During her tenure, Ho has voted against more rules than any other member in the PCAOB’s two-decade history, The Wall Street Journal reported in June 2024. Among her lone dissents, Ho voted against a pair of rules passed in November 2024 aimed at improving audit transparency and requiring more disclosure of financial data, according to a Thompson Reuters report at the time.

Although the PCAOB submitted the rules to the SEC, its overseer, the watchdog withdrew them this February after “many stakeholders, including firms,” sent comments to the SEC, Ho said in a speech at a Miami, Florida forum in March.

Ho has also advocated for changes to the watchdog’s approach during her term, telling attendees at a conference in Kent State, Ohio in May that the PCAOB over the past three years “has done little to improve audit quality and has possibly harmed future audit quality, even though there has been no shortage of messaging that mentioned investor protection and audit quality.”

In her remarks, Ho called for further “innovation” in the PCAOB’s public company and broker-dealer auditing, pointing to the breakneck evolution of AI technologies, as well as calling for the watchdog to “rightsize” its regulations.

Her remarks came shortly after Paul Atkins, a critic of the PCOAB and an advocate of less strict enforcement actions by regulators, was sworn in as chair of the SEC in April. Nominated for the role in January, the choice of Atkins for chair heralded what became a tumultuous year for the PCAOB — facing other leadership shakeups as well as challenges to its future existence.

In July — about three months after Atkins took the SEC’s helm — less than a month after a failed attempt by Republican lawmakers to eliminate the agency, PCAOB chair Erica Williams stepped down from her role. The watchdog appointed George Botic to the role of interim chair shortly afterwards.

Ho’s decision to depart “indicates that she has taken herself out of consideration for both renewal of her current board seat and for a different seat (Chair),” Robert J.  Pawlewicz, an assistant professor of accounting at the University of Virginia’s Robins School of Business told CFO Dive in an email.

The remaining three board members — Botic, Kara Stein, and Anthony Thompson — are in the middle of active terms, but in Pawlewicz’s opinion, they are unlikely to “be asked to continue in their seats, so they are under no pressure to resign,” he said.  

It’s likely Botic, Stein and Thompson will be replaced by Chair Atkins by the end of January, Pawlewicz said. Shortly following Williams’ resignation in July, Atkins posted a call for five new board members and asked for applications, an “unprecedented” move which “created a lame duck PCAOB that will have a short shelf life,” Pawlewicz said.

The PCAOB declined to comment further beyond its Tuesday release.