Professional Services Monitor: Today

 

June 28, 2010

Supreme Court Ruling Forces Minor Changes to Sarbanes-Oxley

Filed under: SOX 404 — psmtoday @ 11:10 am

A Supreme Court ruling today on the case Free Enterprise Fund v. Public Company Accounting Oversight Board will force some minor changes to the Public Accounting Oversight Board created by the Sarbanes-Oxley Act.  The narrowly-focused ruling, based on separations of powers, found that the law as written by Congress unduly restricted the president in hiring and firing board members of the PCAOB.

The high court, in a 5-4 opinion by Chief Justice John Roberts, found fault with some parts of the Public Company Accounting Oversight Board, which was created as part of the act in the wake of collapses at Enron and WorldCom.

Congress had given the five-member board, a not-for-profit corporation, broad regulatory authority over accounting firms that audit publicly traded companies.

Justice Roberts said the structure of the accounting board violated constitutional separation-of-powers principles because it was too difficult for the president to remove board members.

“The president cannot take care that the laws be faithfully executed if he cannot oversee the faithfulness of the officers who execute them,” Justice Roberts wrote.

Justice Roberts said Sarbanes-Oxley “remains fully operative as a law.” He said the unconstitutional provisions governing the board could be severed from the rest of the law.

Justice Roberts said the Securities and Exchange Commission will now have the authority to remove board members at will. Previously, the SEC could only remove members for good cause.

June 17, 2010

FY2009 Audit Fees Updated

In April, we took a preliminary look at FY2009 audit fees, based on the the proxy statements processed at the time.  We have updated this analysis with an additional 1,500 filers, bringing the total to 3,636 proxies tracked between January 1 and June 15, 2010.

The preliminary analysis showed PricewaterhouseCoopers with a small increase in total fees.  Now, PwC has a change of -0.8%, with KPMG next among at the Big Four at -2.8%.  Among the top ten firms by total fees, only ParenteBeard had positive growth at 6.1%.

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