Amid President Donald Trump’s frenzied deregulation of financial markets, his administration just stacked the country’s top watchdog of corporate auditors with Trump loyalists and former executives of the companies they will now oversee. Designed to prevent another Enron catastrophe, the watchdog organization supervises the handful of big auditors that dominate the space and ensures major companies aren’t cooking their books, deceiving their investors, and jeopardizing the country’s financial stability.
On January 30, Trump’s US Securities and Exchange Commission (SEC) chair, Paul Atkins, a “deregulation zealot,” announced a suite of new officials to the Public Company Accounting Oversight Board (PCAOB), the independent organization tasked with overseeing public companies’ accounting. One of those appointees served as a senior partner at one of the auditing giants he will now monitor, while two others come straight from the Trump administration, further tying the ostensibly independent organization to the Trump White House.
The Public Company Accounting Oversight Board is a nonprofit corporation created in the wake of the 2001 accounting scandal at the Houston-based energy giant Enron, which led to a $40 billion shareholder lawsuit and the dissolution of one of the world’s largest accounting firms.
The board, which operates under the Securities and Exchange Commission, now sets industry auditing and enforcement standards and oversees the private auditors that review major companies’ books, primarily to protect investors and ensure market stability. Much of the organization’s work focuses on the “Big Four” accounting firms — Deloitte, EY, KPMG, and PricewaterhouseCoopers (PwC) — which effectively operate as an oligopoly in auditing major corporations.
Because the Big Four firms narrowly compete against each other in a captured market, there’s an incentive for them to go easier on the corporations that pay their salaries, such as by…
Auteur: Lucy Dean Stockton
