{"database": "press", "table": "releases", "rows": [["https://wagner.house.gov/media-center/press-releases/wagner-mchenry-urge-pcaob-reconsider-proposed-changes-company", "Wagner, McHenry Urge PCAOB to Reconsider Proposed Changes to Company Noncompliance with Laws and Regulations Standards", "2023-08-24", "2023", "2023-08", "Republican", "House", "MO", "Ann Wagner", "W000812", "wagner.house.gov", "wagner", "https://wagner.house.gov/media-center/press-releases", "scraper", "WASHINGTON, D.C.\u2014 The Chairman of the House Financial Services Committee, Patrick McHenry (NC-10), and Chairman of the Capital Markets Subcommittee, Ann Wagner (MO-02), sent a letter to the Public Company Accounting Oversight Board (PCAOB) urging the Board to reevaluate the proposed changes in its Exposure Draft regarding Company Noncompliance with Laws and Regulations (NOCLAR) standards. The proposed changes are in direct conflict with existing rules and risk undermining audit quality, auditor independence, and the materiality standard.\n\nRead the full letter here or below:\n\n\u201cWe write to you with serious concern regarding the recent Exposure Draft from the Public Company Accounting Oversight Board (\u2018PCAOB\u2019 or \u2018Board\u2019) on Company Noncompliance with Laws and Regulations (\u2018NOCLAR\u2019).\n\n\u201cPreventing fraud and maintaining financial reporting integrity are paramount to the effective functioning of U.S. capital markets. However, the proposed changes to NOCLAR standards risk undermining audit quality. The revisions to NOCLAR standards are likely to divert auditors\u2019 attention, dedication, and resources away from their principal responsibility of rigorously evaluating financial statements. This concern comes at a critical time, as the PCAOB is emphasizing the need to enhance audit standards, as underscored by Chair Erica Williams\u2019 recent Op-Ed. The proposed realignment will likely have the opposite effect resulting in a weakening of audit quality and increasing the risk of investor harm.\n\n\u201cAuditors are not legal professionals and should not be expected to function as law enforcement agents. Notably, the Securities and Exchange Commission (\u2018SEC\u2019) has long-established rules for auditor independence. These rules prohibit auditors in the U.S. from offering services to audit clients that fall under the purview of legal experts.\n\n\u201cThe proposed NOCLAR requirements appear to be in direct conflict with these existing rules. They would compel public accounting firms to establish specialized teams responsible for identifying laws and regulations imposing additional scrutiny for noncompliance. Further, the PCAOB\u2019s proposal may entangle auditors in legal and managerial decisions beyond their scope, potentially impinging on their ability to accurately assess financial statement information.\n\n\u201cAdditionally, the proposal risks undermining the materiality standard that is the foundation of U.S. capital markets, and to which the PCAOB must adhere. The vague and complex language in the Proposal, such as \u2018could reasonably\u2019 and \u2018may have occurred,\u2019 introduce uncertainty regarding the PCAOB\u2019s future adherence to the materiality standard as established in TSC v. Northway. Use of such terms creates considerable ambiguity in determining the relevant laws and regulations that necessitate evaluation. This ambiguity, combined with the renewed emphasis on noncompliance, could lead to adverse outcomes for U.S companies, including increased legal and compliance costs. It may also divert the attention of management, employees, and audit committees from financial reporting. Safeguarding investors requires the PCAOB to meticulously assess the repercussions and ramifications of this proposal for the public company model and, by extension, the attractiveness of U.S. capital markets.\n\n\u201cU.S. companies are already burdened with substantial compliance obligations and are overseen by federal and state authorities. The existing oversight and enforcement frameworks competently address instances of noncompliance. While auditors have traditionally been responsible for detecting illicit activities as part of financial audits, broadening their purview to encompass noncompliance with all laws and regulations could blur the lines between legal, managerial, and audit functions. Put succinctly, the responsibilities of auditors must not be confused for the role of law enforcement, and the PCAOB must refrain from conflating its role as the \u201cauditor of the auditors\u201d with the mission of other prudential regulators.\n\n\u201cThe PCAOB should reevaluate the suitability of its proposed NOCLAR standards and revise any final standards to more effectively align with the PCAOB\u2019s mission. Striking a delicate equilibrium between fraud prevention, audit quality, and preserving essential financial reporting duties is imperative. We greatly appreciate your attention to these concerns and anticipate a productive dialogue on this critical matter.\u201d", 1, "2026-03-30T01:40:41Z", "2026-04-08T00:30:18Z"]], "columns": ["url", "title", "date", "year", "month", "party", "chamber", "state", "member_name", "bioguide_id", "domain", "scraper", "source", "date_source", "text", "has_text", "collected_at", "updated_at"], "primary_keys": ["url"], "primary_key_values": ["https://wagner.house.gov/media-center/press-releases/wagner-mchenry-urge-pcaob-reconsider-proposed-changes-company"], "units": {}, "query_ms": 0.8159680292010307, "source": "dwillis/congress-press", "source_url": "https://github.com/dwillis/congress-press", "license": "MIT", "license_url": "https://github.com/dwillis/congress-press/blob/main/LICENSE"}