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 Statement on Public Meeting On Auditor Independence and Audit Firm Rotation

DATE: June 28, 2012
SPEAKER: Steven B. Harris, Board Member
EVENT: PCAOB Public Meeting
LOCATION: San Francisco, CA

Mr. Chairman – In my opinion, there is no more important issue confronting the Board than ensuring the independence, objectivity and professional skepticism of auditors as they conduct their audits.

Both our own PCAOB inspection reports and those of many of our international counterparts recognize that more must be done in this area.

Whether the answer is mandatory rotation, re-tendering, greater transparency of audit tenure, enhanced independent audit committees, or any of the other recommendations that resulted from our first roundtable discussion – or those that may be offered today – I believe that all alternatives must be thoroughly considered to further shareholder trust in the quality of the audit.

I believe that the public policy making process is best served by hearing from all interested parties in an open, deliberative process.

While some  of the recommendations we have heard so far are within the SEC’s jurisdiction – not ours – I think the hearing record we are creating may serve as a potentially valuable tool for their policy-making consideration as well.

I join my colleagues here in looking forward to an illuminating and robust discussion of the many implications of our concept release on auditor independence.  Thank you, Mr. Chairman.