The U.S. Chamber of Commerce (“Chamber”) Center for Capital Markets Competitiveness appreciates the opportunity to comment on the Public Company Accounting Oversight Board (“PCAOB” or “Board”) Exposure Draft on Company’s Noncompliance with Laws and Regulations (“Exposure Draft” or “Proposal”), which is part of the Board’s standard-setting agenda to update and modernize PCAOB Auditing Standards (“AS”). While the Chamber supports the PCAOB’s goal to update its auditing standards with thoughtful consideration and due process , however, we do not believe that the Proposal meets that goal.
The PCAOB has failed to explain its reasoning for the proposal and has not provided commenters with a sufficient cost-benefit analysis. As we explain in greater detail below, the Proposal, if enacted, could degrade audit quality, harm investor protection, weaken attorney-client privilege protections, and impose additional audit costs on issuers by an estimated $36 billion dollars, far exceeding Sarbanes-Oxley 404b implementation