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The US audit regulator created in the wake of the Enron scandal has been granted a reprieve after the Senate parliamentarian ruled that Republicans’ plan to shutter the agency as part of their giant tax and spending bill would violate Senate rules.
Republicans had planned to scrap the Public Company Accounting Oversight Board and hand its powers to inspect and fine audit firms to the Securities and Exchange Commission, a measure they said would save money for both the US taxpayer and the listed companies that pay fees to fund the agency.
But the Senate parliamentarian, which advises on rules for the upper chamber, said that the plan did not comply with requirements that only measures that affect the US budget can be included in the tax and spending bill.
The parliamentarian also axed a string of measures that would have cut the pay of officials at the Federal Reserve, defunded the Consumer Financial Protection Bureau and reduced spending on the Treasury’s office of financial research.
The PCAOB is responsible for inspecting accounting firms in the US and overseas that audit companies listed on US exchanges, and it had argued that the SEC would not have the budget or the expertise to take over these functions.
Under current chair Erica Williams, the agency has levied record fines on audit firms but faced criticism from some in the profession that it has focused unfairly on minor infractions. It has also been accused of failing to take account of audit firms’ views when setting tough new standards.
Williams welcomed the Senate parliamentarian’s ruling in a statement on Friday. “This is good news for millions of Americans whose retirement savings and investments would be put at risk by eliminating the PCAOB,” she said.
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