Gensler Delivers Remarks on 20th Anniversary of Sarbanes-Oxley

At the end of July, SEC Chair Gary Gensler delivered remarks before the Center for Audit Quality program “Sarbanes-Oxley at 20: The Work Ahead.” His speech focused on the lead up to Sarbanes-Oxley including the accounting scandals at Enron, WorldCom, and Tyco, which lead to the creation of the PCAOB, an independently funded board under the regulatory oversight of the SEC that was tasked with setting enhanced auditing standards. He noted the PCAOB is currently in the process of updating almost all of the remaining interim standards. Regarding the inspection and investigation of auditing firms, Gensler stated he “asked the PCAOB to consider adding updates for auditor independence standards to their agenda.” His speech also covered issues related to accounting standards under the FASB, corporate governance, and foreign issuers in the United States. He noted under the “Holding Foreign Companies Accountable Act of 2020” if the PCAOB is unable to inspect or investigate completely registered public accounting firms located in foreign jurisdictions, issuers that use those firms for three consecutive years face prohibitions on their securities trading in the U.S. Gensler stated, however, that “We are not willing to have PCAOB inspectors sent to China and Hong Kong unless there is an agreement on a framework allowing the PCAOB to inspect and investigate audit firms completely.”