US Audit Board Chair’s Departure Opens Door to Oversight Reforms

The Trump administration has another shot to remake auditor oversight for the world’s largest capital market after months of debate over the future of the US audit regulator.

The impending departure of Erica Williams, chair of the Public Company Accounting Oversight Board, gives the Securities and Exchange Commission an opening to pick a new leader for the board. An agenda reset would likely follow, but the commission could make deeper reforms by replacing other members of the board or cutting its $400 million annual budget.

Williams said Tuesday that her last day at the PCAOB would be July 22. She is stepping down at the request of SEC Chair Paul Atkins, Williams told staff in an email.

Atkins has not yet said how he’ll fill the leadership vacancy at PCAOB once Williams leaves, but his pick is expected to shed more light on his longer-term plans for the board and its mission.

“There is a question as to whether there even should be a new chair or just an acting chair,” said Dickinson Wright PLLC member Jacob Frenkel, an outside counsel to audit firms who has sued the board over its enforcement practices.

Congress created the board in 2002 as one of several reforms meant to restore investor trust in corporate financial reports after accounting scandals that toppled WorldCom Inc. and Enron Corp. The Sarbanes-Oxley Act tasked the board with inspecting the work of public company auditors plus setting and enforcing standards—all under the watchful eye of the SEC.

The first Trump administration floated dissolving the board as part of a White House budget proposal. The policy playbook known as Project 2025 revived that idea for the current Trump administration, proposing to hand the SEC the job of auditor oversight.

The board’s elimination was included in a House-passed version of a GOP tax and spending package, but was ultimately pulled from the final bill that Trump signed into law July 4.

Investor Expectations

With Williams on the way out, audit watchers are turning their focus to the SEC, which appoints the PCAOB members and approves its budget.

There’s no consensus who might be on a short list to take over the board.

Regardless of the choice, the leadership shakeup that’s been pending since last year’s presidential election is likely to leave the audit board in limbo for months as SEC members—and possibly Congress again—continue to debate what to do with it.

The SEC and PCAOB declined to comment.

“I know you have questions about what is next for PCAOB leadership,” Williams said in an email to board staff Tuesday. ”Unfortunately, I do not have the answers you deserve.”

The repeated changes to the board and its leadership tied to Washington politics doesn’t serve investors, said Sandra Peters, head of financial reporting policy for the CFA Institute, a professional body for investment analysts.

Investors expect independent standards, fair inspections and “respectable enforcement,” Peters added. “That shouldn’t be controversial in a market that depends on the reliability of information.”

Consecutive presidential administrations have overhauled the board, replacing all or most of its members twice since 2017. Atkins could follow suit, prompting a third swing not just in priorities and approach but institutional knowledge.

The board operated under an acting chair for six months before Williams took the helm in January 2022. She retained many of the board’s top staff, but that was not the case under her predecessor Bill Duhnke, who replaced most of the board’s division directors when he took over in 2018.

For now, the board can continue to operate without a chair with a quorum of the four remaining members, said David Fredrickson, senior of counsel at Covington & Burling LLP who led a team that crafted the framework for the SEC’s board oversight.

The majority of the board’s work “is a constant background hum of inspections, investigations, disciplinary actions and that will just continue,” Fredrickson said.

Auditors shouldn’t be complacent even as questions about the board’s future linger. As market gatekeepers, auditors have obligations to their public company clients, Frenkel said.

“The plaintiffs’ bar is not going away,” he said.