- Erica Williams is the new chair of the Public Company Accounting Oversight Board (PCAOB), replacing acting head Duane DesParte, the Securities and Exchange Commission has announced.
- Williams has been a deputy chief of staff to three former SEC chairs and assistant chief litigation counsel for the SEC’s enforcement arm, giving her extensive experience in the federal government’s oversight of public companies.
- After almost a dozen years at the SEC, she served as special assistant and associate counsel in the White House under President Barack Obama, where she focused on financial and economic policy issues. For the last few years she has been a litigation partner at Kirkland & Ellis LLP.
The PCAOB board is rounded out with DesParte, former SEC Commissioner Kara Stein, former Treasury Deputy Assistant Secretary Christina Ho and Anthony Thompson, executive director of the Commodity Futures Trading Commission.
“Erica, Christina, Kara, and Tony have demonstrated deep commitment to public service,” SEC Chair Gary Gensler said in a statement. “They will represent the interests of investors and the public.”
PCAOB, created as part of Sarbanes-Oxley to improve audit quality, took a hands-off approach under former chair William Duhnke, a Trump administration appointee who was replaced earlier this year by DesParte.
An internal report released in October found persistent flaws in the auditing of U.S. companies, especially in internal controls over financial reporting and reporting on revenue. Also needing improvement is how companies do their accounting estimates and inventory tracking. Auditor independence is also a weak area.
During the Trump administration, there was talk of folding PCAOB’s operations into the SEC, but a proposal in the federal government’s 2021 budget request didn’t go anywhere.
“I’m not sure this is something we need to do,” Rep. Brad Sherman (D-Calif.), an accountant by training and chair of the House Financial Services subcommittee on investor protection, said at the time.
To help the board step up oversight of foreign companies listed on U.S. exchanges, the SEC last week approved PCAOB’s framework for identifying auditing firms, and the jurisdictions they’re in, whose lack of cooperation makes it hard for the board to assess the quality of the audits the companies are getting.
If the firms or the jurisdictions they’re in don’t cooperate over three years, the SEC has the authority to remove them from trading.
“Finance is about trust, and the PCAOB has a critical role to play in ensuring that public company financial disclosures can be trusted by investors,” Gensler said.