Michael Oxley, co-author of the Sarbanes-Oxley Act of 2002, was questioned on whether or not he believed the Supreme Court would find Sarbox unconstitutional. The Supreme Court is currently reviewing the legislation for constitutionality. An auditor from Nevada claims the Public Companies Accounting Oversight Board or PCAOB, put him out of business. He then filed a lawsuit claiming the PCAOB and the legislation is unconstitutional and the case has escalated to the Supreme Court.
"I'd be surprised to see the court find the entire act unconstitutional," said Oxley, a former House member from Findlay, Ohio. But the decision will "almost certainly will come down to a 5-to-4 vote."
Michael Oxley and Richard Thornburgh
Keith Hodan | Tribune-Review
Oxley continued, "We set up the [PCAOB] so the Securities and Exchange Commission would appoint the commissioners, and anything they did would have to be approved by the SEC," Oxley said. He also said he expects a court decision in the next few weeks.
Here is a little irony for you, the PCAOB, who enforce the need to scrutinize financials for reasonableness and accuracy, and, who have the authority to set auditing standards for public companies and can discipline accounting firms whose audits are deemed deficient, can set the fees they charge public companies without any oversight from the President of the United States. To put this into perspective, the US President makes $400,000 a year as a salary for the job. The PCAOB Chairman, Mark Olson, took home $654,406 in 2008 and several other employees took home over $500K. This salary EXCEEDS the $500,000 salary cap set by the Obama administration for executives of banks taking bailout money.
I still stand by my previous statements, since the government had the power to require such things as Sarbanes-Oxley, they should also have the power to regulate how much it should cost companies to comply. If this means the current structure of the PCAOB is unconstitutional because it falls outside of the ability to be overseen by the Government, then it should be changed. The PCAOB enforces the requirement that audit firms be overseen, shouldn't be PCAOB be overseen by someone too?