About Face: How Much of Current SEC Policy Will the Trump Administration Reverse?

By John C. Coffee, Jr. and Joel Seligman December 3, 2024 by renholding

The future of the Securities and Exchange Commission (“SEC”) is currently uncertain. Given the Trump election, Republican majorities in both the House and Senate and soon at the SEC, we focus on what may happen next and, even more importantly, …

Do Investors Care Who Led the Audit?

By Daniel Aobdia, Vincent Castellani and Paul Richardson April 23, 2024 by renholding

Following a lengthy and contentious standard setting process, the Public Company Accounting Oversight Board (PCAOB), the U.S. regulator overseeing the auditors of publicly traded companies, implemented Rule 3211 in 2017. This rule requires audit firms to disclose the name of …

Latham & Watkins Discusses the Proposed ESG Auditing Rule You Know Nothing About

By Sarah E. Fortt and Malorie R. Medellin September 20, 2023 by renholding

On June 6, 2023, the Public Company Accounting Oversight Board (PCAOB), the nonprofit corporation established by Congress to oversee the audit of public companies, proposed new auditing standards designed to further its “investor-protection mandate.”[1]These standards, if adopted, would …

Wachtell Lipton Discusses PCAOB Proposal to Expand Auditors’ Oversight Role

By Steven A. Rosenblum, Trevor S. Norwitz, Wayne M. Carlin, Victor Goldfeld, Jenna E. Levine and Carmen X. W. Lu August 2, 2023 by renholding

The Public Company Accounting Oversight Board (PCAOB) has proposed changes to its auditing standards that would significantly expand auditors’ responsibilities and oversight of a company’s noncompliance with laws and regulations. If adopted as proposed, the rules would require auditors to …

Cravath Discusses PCAOB’s Proposed Amendments to Auditing Standards

By Elad Roisman, Michael Arnold, Kimberley Drexler and Lisa Kohl July 26, 2023 by renholding

On June 6, 2023, the U.S. Public Company Accounting Oversight Board (the “PCAOB”) proposed amendments to its auditing standards that would increase auditor obligations in identifying, evaluating and communicating with respect to noncompliance with laws and regulations (“…

Are We Seeing Double? Regulatory Overlap Between the SEC and the PCAOB

By Sarah J. Williams October 31, 2022 by renholding

The U.S. Securities and Exchange Commission (SEC) recently announced that it was initiating proceedings against a former audit partner at PricewaterhouseCoopers LLP for violating professional standards in reviewing the financial statements of Mattel, Inc. One might wonder why it is …

Revisiting the Audit Expectations Gap

By Wendy Heltzer and Mary Mindak July 25, 2022 by renholding

As the regulation of public company audits evolves, questions persist over whether there is still a gap between the public and auditors over expectations for the responsibilities of auditors – what we call the expectations gap. In a recent study, …

Skadden Discusses SEC’s Final Amendments Under Holding Foreign Companies Accountable Act

By Brian V. Breheny, Raquel Fox, Julie Gao, Kenneth W. Chase and Leo W. Chomiak December 15, 2021 by benzonenshayn

On December 2, 2021, the U.S. Securities and Exchange Commission (SEC) adopted final amendments implementing the disclosure and submission requirements of the Holding Foreign Companies Accountable Act (HFCA Act). In addition, the adopting release establishes the SEC’s procedures for (i) …

Supreme Risk for FINRA and Other SROs

By Benjamin P. Edwards August 30, 2021 by renholding

Most efforts to manage systemic risk tend to focus on risks arising from within financial markets, from existing regulators, or from legislative misadventures. Yet self-regulatory organizations (SROs) and the markets that depend on their steady functioning now face an underappreciated …

Paul Weiss Discusses SEC Move to Consider ESG Disclosures

By Daniel J. Kramer, David S. Huntington, Mark S. Bergman, Brad S. Karp and Audra J. Soloway June 22, 2021 by renholding

The SEC recently closed its period of public comment on the topic of climate-change disclosures after receiving hundreds of submissions. The comments, not surprisingly, reflected a range of views regarding climate-related disclosures, including whether the SEC should or must limit …

Cahill Gordon Discusses SEC Rules Under Holding Foreign Companies Accountable Act

By Geoffrey E. Liebmann and Michael A. Chaia May 19, 2021 by renholding

The Securities and Exchange Commission (the “SEC”) has adopted interim final rules^[1] to implement the Congressionally-mandated document submision and disclosure requirements of the Holding Foreign Companies Accountable Act (the “HFCA Act”), which became effective on May 5, 2021.

The …

The Efficacy of PCAOB Operational Decision Making

By James J. Blann, Tyler J. Kleppe and Jonathan E. Shipman May 11, 2021 by renholding

The operating budget of the Public Company Accounting Oversight Board (PCAOB) has grown significantly since the regulator’s inception, with the total annual resources consumed by the PCAOB almost doubling—from $127 million to $252 million—between 2006 and 2018 (PCAOB 2007, 2019). …

The Backlash Against Chinese-Company Listings on U.S. Exchanges Has a Long History

By Georges Ugeux January 25, 2021 by renholding

The reach of American law has recently entered familiar territory: listings of international companies on U.S. exchanges. Yet the listings of Chinese companies have in particular prompted a backlash. I want to shed some light on the situation – and …

Biden and the SEC: Some Possible Agendas

By John C. Coffee, Jr. December 2, 2020 by renholding

This is the gossip season, and almost everyone has heard a rumor about who will be the next chair of the SEC. Although I was interviewed by the Biden transition team (for my views, not as a candidate), my sources …

How Congress Got It Right on Audit Oversight

By James R. Doty February 24, 2020 by renholding

President Donald Trump’s proposed $4.8 trillion budget calls for folding the Public Company Accounting Oversight Board (PCAOB), America’s audit watchdog, into the Securities and Exchange Commission, the nation’s primary financial regulator. The stated goal is to eliminate duplicative regulations and …

Financial Regulators Warn Over Chinese Audit Quality Amid Coronavirus Outbreak

By Jay Clayton, Bill Hinman, Sagar Teotia and William D. Duhnke III February 20, 2020 by renholding

In November 2019, we met with senior representatives of the four largest U.S. audit firms, including certain of their network representatives, to discuss audit quality across their global networks and certain of the challenges faced in auditing public companies with

…

Chairman Clayton Delivers Statement at Open Meeting of SEC

By Jay Clayton December 19, 2019 by renholding

Good morning. This is an open meeting of the U.S. Securities and Exchange Commission, under the Government in the Sunshine Act.

Today, we have six items on the agenda. As I’ve remarked in the past, we must efficiently allocate the

…

How Do Auditors Determine What’s Material?

By Preeti Choudhary, Kenneth Merkley and Katherine Schipper October 2, 2019 by renholding

U.S. public company audits all include a simple step to determine whether an amount is large or significant for their clients, otherwise known as materiality. This decision influences the planning and procedures of the other facets of the audit as …

Do Investors Care Who Did the Audit?

By Marcus M. Doxey, James G. Lawson, Thomas J. Lopez and Quinn T. Swanquist September 14, 2018 by renholding

In 2008, the U.S. Department of the Treasury’s Advisory Committee on the Auditing Profession called for a “standard-setting initiative to consider mandating the engagement partner’s signature on the auditor’s report” as a way to increase audit transparency.[1] The Public …

The Revolving Door between the PCAOB and Large Audit Firms

By Bradley E. Hendricks, Wayne R. Landsman and F. Dimas Peña-Romera August 2, 2018 by renholding

In a recent study, we examine the flow of workers between the Public Company Accounting Oversight Board (PCAOB) and large U.S. audit firms. The PCAOB, created by the Sarbanes-Oxley Act of 2002, oversees the audits of public companies by, among …

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