French regulator warns of 'damaging consequences' if US audit watchdog is dismantled
NEW YORK, June 5 (Reuters) - The French audit regulator has warned of "damaging consequences" if U.S. lawmakers advance a plan to eliminate its U.S. counterpart that has oversight of public companies' auditors, according to a letter seen by Reuters.
Congress is debating legislation that would dismantle the Public Company Accounting Oversight Board, a nonprofit created by Congress in 2002 in response to a series of high-profile accounting scandals and auditing failures.
As part of a sweeping tax and spending bill, Republicans are pushing to move auditor oversight to the Securities and Exchange Commission, which has seen a staff exodus as part of President Donald Trump's and Elon Musk's efforts to overhaul the federal workforce.
Congress' plan to axe the PCAOB could jeopardize the ability of France's High Authority of Auditing (H2A) to coordinate with its U.S. counterpart, including on audits underway or about to begin, H2A President Florence Peybernes said in a letter to the PCAOB chair dated May 28 and seen by Reuters late Wednesday.
Peybernes' statements follow a similar warning from German counterparts, according to a separate letter seen by Reuters.
The PCAOB has agreements in place with regulators across the European Union and elsewhere that would need to be reworked should U.S. lawmakers dismantle the group and task SEC with its responsibilities.
Even if regulators successfully resolve such issues, Peybernes said she foresaw serious disruptions during the transition.
Representatives for H2A and the PCAOB did not respond immediately to requests for comment on the letter or the legislation.
PCAOB Chair Erica Williams has also separately warned lawmakers of the risks of eliminating the PCAOB, saying in an April letter to Democratic Congresswoman Maxine Waters: "With millions of Americans invested in the stock market, including through 401(k)s and pensions, auditors need to perform their audits with more care than ever. Now is not the time for a major disruption in audit oversight."
SEC Chairman Paul Atkins has said as recently as Tuesday he expects the SEC could take over the PCAOB's functions. The agency has asked for a $100 million buffer in its budget to accommodate potential new responsibilities.
A spokesperson for the SEC declined to comment beyond the chairman's prior remarks.
Many Republicans have long criticized the PCAOB as costly, while advocates point to huge improvements in public companies' financial reporting since the group was founded.
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