Today, the Commission approved new standards for firms wishing to maintain their registration with the Public Company Accounting Oversight Board (PCAOB). These updated regulations are designed to help the PCAOB maintain an accurate public record of registered firms.
Under the new rule, firms that fail to file their required annual reports and pay their annual fees for two consecutive years will trigger a formal process to withdraw their registration. This approach ensures that firms failing to fulfill their obligations are not misleading the public by claiming PCAOB registration.
The new standard includes a 60-day waiting period before a firm’s registration is officially withdrawn, providing firms an opportunity to notify the PCAOB of their intention to remain registered.
Currently, there are 1,544 public accounting firms registered with the PCAOB. However, 80 of these firms failed to file annual reports or pay fees for 2022 and 2023, and none have issued an audit report for any public company issuer between January 1, 2021, and August 31, 2024.
With the adoption of this new rule, the PCAOB now has a clear mechanism for removing firms that are inactive, non-operational, or have shown no intention to remain registered.
The Commission expressed gratitude to the PCAOB staff and Board members for their dedication to this issue, as well as to colleagues at the SEC, including Paul Munter, Shaz Niazi, Mai-Khoi Nguyen-Thanh, Greg Hillson, and others, for their collaborative efforts.