Erica Williams, chair of PCAOB, warned on Apr. 29 against the U.S. House Financial Services Committee introducing draft legislation that would effectively shutdown the PCAOB by moving the board's responsibilities under the SEC. according to Accounting Today.

Speaking at a Apr. 29 meeting of the Board's Investor Advisory Group, Williams talked about the improvements in the PCAOB's 2024 inspection findings  for the biggest audit firms, but also noted that the board's work is not over.

"Like many of you, I am deeply troubled by draft legislation being considered by the House Financial Services Committee that proposes to eliminate the PCAOB as we know it," she said, adding that she was previously at the SEC. "The SEC was my professional home for 11 years. I have deep admiration and respect for the incredible professional staff there. They are excellent at what they do. It is different from what we do here at the PCAOB."

Williams said that "the unique experience and expertise built up by the board over the years cannot simply be cut and pasted without considerable investor risk during a time when markets are already volatile. "The disruption to inspections alone while a new program gets up and running could last years," she noted.

Williams cited the accounting scandals in the early 2000s at firms like Enron and WorldCom that resulted in the passage of the Sarbanes-Oxley Act of 2002 and the PCAOB's establishment, Accounting Today reports.

"It takes a minimum of 480 experienced staff to conduct the inspections required by the Sarbanes-Oxley Act in addition to many others who are essential to supporting their work, and hiring them would come at considerable cost to the SEC—that is assuming it is possible to hire them at all," Williams explained. "There is currently an industry-wide shortage of accounting and audit talent, and our team members are some of the most respected and employable members of the profession."

PCAOB inspections staff members have an average of 22 years of experience, which includes a decade in public accounting prior to joining the PCAOB, Williams said. Current PCAOB staffers have experience in 30 different industries, expertise throughout 40 different subject matters from revenue recognition to derivatives and technology while speaking 33 different languages, according to Accounting Today. 

"That language expertise is necessary because the PCAOB regularly conducts inspections in more than 50 jurisdictions around the world," Williams stated. "Local laws in many of those countries require cooperative agreements that the PCAOB has secured over years of negotiation to ensure we have the access necessary to inspect and investigate completely."

Those agreements are not entirely transferable to the SEC, she said.