Supreme Court Decision on PCAOB Constitutionality Decision Expected Monday

On December 7, 2009, the Supreme Court heard oral arguments in the case of The Free Enterprise Fund v. Public Company Accounting Oversight Board. This case involves the constitutionality of the appointment provisions for members of the Public Company Accounting Oversight Board (PCAOB). Under the Sarbanes-Oxley Act (SOX), PCAOB members are appointed by the SEC. The plaintiffs claim that the appointment clause renders the PCAOB unconstitutional because board members are not appointed by the President, subject to confirmation by the Senate.

In an amicus curiae (friend of the court) brief supporting the PCAOB, the CAQ observed that, “Although only a few years have passed since the passage of [SOX], the evidence demonstrates that regulation by the PCAOB has led to substantial progress in meeting Congress’ goals of improving audit quality and increasing investor confidence.”

More to come next week.