US Chamber Submits Comments to SEC on PCAOB Firm Engagement

Dear Secretary Countryman,

I hope this message finds you well. The U.S. Chamber of Commerce Center for Capital Markets Competitiveness (“Chamber”) has some thoughts to share regarding the Notice of Filing of the Public Company Accounting Oversight Board (“PCAOB” or “Board”) Proposed Rules on Firm and Engagement Metrics and Related Amendments (“Proposed Rules” or “adopting release”). We believe that the current SEC comment period for these Proposed Rules doesn’t allow for a wide range of viewpoints, especially during the holiday season.

In our opinion, there are several reasons why the SEC should reconsider its approval of the Proposed Rules. The proposed disclosures, while aiming to provide transparency, unfortunately fall short of what would truly be considered material information that investors and audit committees need. Additionally, the metrics proposed may not be consistent with standardization practices, which could cause more confusion than clarity among stakeholders.

It’s important to note that the rush to finalize these rules without providing ample time for public comments goes against the principles of transparency and due process. The complexity of the adopting release and the timing of its release just before Thanksgiving, coupled with the holiday season, make it challenging for stakeholders to fully engage in the comment process.

While some revisions have been made to the Proposed Rules in response to feedback, there are still concerns regarding the effectiveness of the proposed metrics as indicators of audit quality. The metrics prescribed may not truly reflect how audit firms manage and monitor their practices or measure quality control.

Ultimately, the goal of these rules should be to enhance audit quality and provide decision-useful information for investors and audit committees. However, if the metrics are not aligned with what audit firms consider crucial for assessing quality, then their true value may be in question.

In conclusion, a more collaborative approach between regulators, audit firms, investors, and other stakeholders might lead to a more effective and practical set of metrics that can truly enhance transparency and audit quality. Thank you for considering our feedback on this important issue.

Sincerely,
[U.S. Chamber of Commerce Center for Capital Markets Competitiveness]