Statement on Public Meeting On Auditor Independence and Audit Firm Rotation

Good Morning,

Welcome everyone to the Public Company Accounting Oversight Board's second public meeting on the Board's concept release on ways to enhance auditor independence.

This is the first such meeting the PCAOB has ever held on the West Coast. This meeting will give us the opportunity to benefit from the important perspectives of investors, financial statement preparers, academicians, audit firm professionals and regulators who participate in our financial markets.

We will be discussing some of the most significant issues affecting accounting and auditing today. The U.S. is ever more interconnected and interdependent with economies around the world. Just Tuesday, the Financial Times carried an analysis highlighting the importance of these global links and the interplay between national regulatory systems. Today’s meeting is not uniquely a U.S. discussion, but a global discussion. Around the world, audit regulators are investigating ways to counteract the potential for conflict that stems from the inherent risk in the current auditor payment model, pressure that could affect how an auditor approaches tough decisions on an audit. Auditor skepticism is a concern of people in London, the European continent and in Asia.

The concept release that we issued last August was intended to begin the discussion of auditor independence and the factors that can jeopardize that fundamental investor protection. This roundtable is the next step in that journey. The PCAOB benefits from the diverse range of views that have been gathered through the comment letters, roundtables and public discussions. This public meeting is an extension of that interaction.

This effort is accomplishing a substantive debate on auditor independence, professional skepticism and objectivity. The participation of today’s distinguished panelists will bring different perspectives and divergent views to this debate.

We are honored to have the participation of former SEC Chairman Harold Williams today. We will benefit from the wisdom he has accumulated over a long distinguished career protecting investors and promoting strong public disclosure. We are also deeply grateful for the time spent by the many other speakers scheduled today, in preparing and participating in this open meeting.

I do not predict the outcome of this debate. But I expect that we all can benefit from a robust debate on approaches to improving independence, objectivity and professional skepticism.

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I would like to thank the dedicated PCAOB staff whose efforts have made this meeting possible.