The chair of the Public Company Accounting Oversight Board, Erica Williams, issued a warning Tuesday after the House Financial Services Committee introduced draft legislation that would effectively eliminate the PCAOB by transferring its responsibilities to the Securities and Exchange Commission. 

Speaking at a meeting Tuesday of the PCAOB’s Investor Advisory Group, Williams discussed the improvements in the PCAOB’s 2024 inspection findings for the largest auditing firms, but said the board’s work is far from over.

“Like many of you, I am deeply troubled by draft legislation being considered by the House Financial Services Committee that proposes to eliminate the PCAOB as we know it,” she added, noting that she had previously worked at the commission. “The SEC was my professional home for 11 years. I have deep admiration and respect for the incredible professional staff there. They are excellent at what they do. It is different from what we do here at the PCAOB. The unique experience and expertise built up by the PCAOB over decades cannot simply be cut and pasted without significant risk to investors at a time when markets are already volatile. The disruption to inspections alone while a new program gets up and running could last years.”

Williams pointed to the accounting scandals of the early 2000s at companies like Enron and WorldCom that led to passage of the Sarbanes-Oxley Act of 2002 and the creation of the PCAOB.

“It takes a minimum of 480 experienced staff to conduct the inspections required by the Sarbanes-Oxley Act in addition to many others who are essential to supporting their work, and hiring them would come at considerable cost to the SEC — that is assuming it is possible to hire them at all,” she added. “There is currently an industry-wide shortage of accounting and audit talent, and our team members are some of the most respected and employable members of the profession.”

PCAOB inspections staff members average 22 years of experience, including a decade in public accounting before they ever join the PCAOB, she added. Staffers have experience in over 30 different industries, expertise across 40 different subject matters from revenue recognition to derivatives and technology, and speak 33 different languages.

“That language expertise is necessary because the PCAOB regularly conducts inspections in more than 50 jurisdictions around the world,” said Williams. “Local laws in many of those countries require cooperative agreements that the PCAOB has secured over years of negotiation to ensure we have the access necessary to inspect and investigate completely.”

Those agreements are not necessarily transferable to the SEC, she pointed out.

“None of the agreements contain provisions that would allow the PCAOB’s privileges and responsibilities under the agreements to be transferred to the SEC,” said Williams. “They would have to be renegotiated before inspections could be conducted, which could take years.”

For instance, the PCAOB had struggled for years to gain access to China to conduct inspections of firms located there.

“Of course, this includes China, where for the first time in history, the PCAOB has been successfully inspecting and investigating completely, holding Chinese firms accountable and bringing historic enforcement cases,” said Williams. “The PCAOB secured every concession we demanded from China in the statement of protocol that facilitates our access to inspect and investigate completely. We have their feet to the fire. Scrapping that agreement and starting over gives China the opportunity to exploit the uncertainty in order to avoid scrutiny of its audit work once again, to the detriment of investors.”

She foresees other challenges that would be caused by eliminating the PCAOB, including enforcement and standard-setting.

“Of course, our inspections program is strengthened by tough enforcement carried out by our expert investigators,” said Williams. “And without the talented team working to keep PCAOB standards up to date, there is nothing to inspect against. Every member of the PCAOB team plays a critical role in executing our mission of protecting investors on U.S. markets. And they are irreplaceable.”

The Internal Revenue Service is facing a busy and uncertain future, with major staffing cuts, a decrease in funding, and turnover — including a veritable revolving door of acting commissioners, as Gary Shapley was replaced just days after Melanie Krause stepped down — with more cuts by DOGE looming ahead. 

Ian Comisky, a partner at law firm Fox Rothschild LLP, believes the IRS “is not operating properly” and is being “taken apart.” 

Comisky, who specializes in civil and criminal tax litigation, anticipates growing and continued chaos. The IRS is currently at least 20% understaffed, and that will only grow as cuts continue, he predicted. The agency was given more money in the Inflation Reduction Act of 2022 to improve its efficiency, but of that a huge amount was clawed back. Of the amount designated, cuts were made across the board, affecting enforcement, operations, modernization and taxpayer support services. 

“The latest studies show that mostly enforcement dollars were reduced, and in the last go-round modernization resources were also cut,” said Comisky. “There was a voluntary reduction in force last month. Criminal agents that could help deal with noncompliance have been sent to the border. Some say we could lose as much as $1.6 trillion in revenue, although one view is that we can get enough from tariffs to make it all up.”

The current situation is that there are not enough resources for audits necessary to keep the system honest, while modernization is not being pursued. 

There has also been a tremendous brain drain, according to Comisky: “The people that are left are less experienced. The appeals unit is reluctant to settle cases for fear of criticism. If they cut enforcement without modernizing, the agency can’t operate effectively.”

The reality is that cuts are being made across the board, according to Kelly Myers, a 30-year IRS veteran who now heads up Myers Consulting Group LLC. 

“The cuts are not restricted by job or by office or to overhead-type individuals,” he said. “And not to outreach folks or compliance staff. It’s everybody. There will have to be a transition to a balance between how they execute their priority mission with the people they will have. Response times will be longer because they simply have fewer people. Filed returns with no exception on the return should come out OK. But if there is an exception, someone has to look at it and that will take longer to resolve. For example, 16 weeks will become 20 weeks. Likewise, amended returns have to be manually processed.”

Is this all by design? The effect has not been anticipated, according to Comisky. “The smartest, and those who can work elsewhere, are leaving now,” he explained. “Some of the big law firms believe that there will be no tax litigation for the next couple of years. Some are predicting that the feds will get the benefit of state audits. The sense is, if there is no enforcement, school’s out!”

Intuitively, Myers said he expects that all this means revenue will be down, but he’s not sure how much it will be down. “I’ve had exams that have been closed, shut down because of lack of staff. There are things the IRS would have asked questions about at an earlier time, which would have clarified issues, but they’re not asking questions anymore.”

“When there is less coverage, noncompliance will increase, since no one is looking over your shoulder,” he added. “Some things will not get done. As a former commissioner said some years ago, they won’t do more with less resources, they’ll do less with less resources.” 

CFOs and other senior finance executives are feeling less optimistic about their business expansion plans as tariff worries increase in the U.S. and other parts of the world, according to a new survey.

The survey, released Tuesday by Brex, polled over 500 senior finance executives at global enterprises in the first quarter of the year, and found that optimism falling off sharply in recent months when it comes to growth.

“Strong early-in-the-year optimism around growth, IPOs, and M&As eroded sharply post-tariffs, with growth positivity alone dropping nearly 20 points,” wrote Brex president and CFO Ben Gammell. “Expansion plans have been replaced with calls for stronger risk management frameworks, and leaders are delaying major moves not out of caution, but out of strategic patience. They’re quickly recognizing that moving fast doesn’t always mean moving first.”

Two-thirds (67%) of the finance leaders polled rank mitigating geopolitical instability as the top external concern for 2025. Amid the whiplash over tariff policy, business outlooks have shifted, with positivity about fundraising declining 25 points from 87% to 62%. Employment rates have similarly fallen 24 points from 91% to  67%. Global talent and hiring is also down 20 points from 92% to 72%, while company growth prospects have decreased 18 points from 93% to 75%.

The percentage of leaders who are feeling “significantly more bullish” on the IPO market has dropped from 29% to 18%, while those who are feeling “moderately more bullish” fell from 56% to 48%. Meanwhile, the percentage of CFOs who are feeling “moderately more bearish” doubled from 6% to 18%.

M&A outlook followed a similar pattern, with the percentage of significantly more bullish respondents declining from 40% to 22%, and those who are “moderately more bearish” respondents doubled from 8% to 16%.

Companies feel under pressure to do more with less, and CFOs need to step into more strategic, cross-functional roles, with 95% of the respondents saying their role extends beyond traditional finance, including AI and sales. Among the respondents, 86% of their organizations have a chief accounting officer, and nearly half were hired in the past year. However, only about 50% of finance leaders believe they have real control over where the money goes.

CFOs are consolidating tools, accelerating payments, and proving the return on investment of artificial intelligence as they streamline operations and scale global finance, Three-fourths (75%) of the finance leaders polled indicated they are feeling pressure to prove AI’s ROI, and 87% of finance leaders said their vendors should offer more services so they can consolidate their tech stack. Some 70% of the respondents feel their tools and software are too complex, 73% believe their expense and accounting processes are too manual, and 69% say they have too many financial vendors.