PCAOB Chair Williams Delivers Remarks at Investor Advisory Group Meeting

Remarks as prepared for delivery

Thank you, [Saba Qamar] and [Amy Copeland McGarrity]. And thank you to the Investor Advisory Group (IAG).

It is wonderful to see the many familiar faces and to welcome our new members to your first formal meeting. Reconstituting our advisory groups was the first major action the Board took in 2022.

Since then, the IAG has made significant contributions toward furthering the PCAOB’s goal of protecting investors, and I look forward to your continued efforts this year. Thank you for your time and commitment to investors.

I’m also excited to be joined by another familiar face, George Botic, in his first meeting of the IAG as a Board Member.

Before we begin, I must provide the usual disclaimer that the views I express today are my own and do not necessarily reflect the views of my fellow Board Members or PCAOB staff.

Since our last formal meeting, the talented and dedicated PCAOB staff has been hard at work furthering our strategic goals of modernizing our standards, enhancing our inspections, and strengthening our enforcement.

You will hear from some of them in a moment, including Christine Gunia, who is joining us for the first time in her new role as Director of the Division of Registration and Inspections (DRI).

Christine may be new to the role, but she is no stranger to DRI and the work of protecting investors. Christine has been with the PCAOB for 20 years, most recently serving as Deputy Director of DRI’s Global Network Firm Inspection Program. We are grateful to have her leading DRI and joining us to speak with you today.

First you will hear from [Barbara Vanich] and her colleagues in the Office of the General Counsel about our ongoing work to modernize PCAOB rules and standards – far too many of which have not been significantly updated in decades.

In 2023, the Board took more formal actions on standard setting and rulemaking than any year in the previous 10. And that work continues in 2024 with three proposals so far this year.

I want to particularly thank the IAG for your work highlighting investors’ need for more transparent information from audit firms.

Your advocacy is reflected in two proposals we released earlier this month designed to empower investors, audit committees, and others with more consistent, comparable data about audit firms and their audits.

Of course, your efforts also informed our decision last year to add critical audit matters, or CAMs, to our research agenda. Our work on that project is ongoing, and I know yours continues as well. I look forward to your continued input.

At the same time, our inspection team has been hard at work conducting inspections across the globe.

In December, the PCAOB’s staff issued a Spotlight highlighting our inspection priorities for 2024. These priorities include key risks such as high interest rates and other considerations, like audit areas with recurring deficiencies that auditors should be focused on when planning and performing audit procedures.

I’m glad you will have a chance to hear directly from Christine on our inspection activities later today.

Of course, we also continue strengthening enforcement, so bad actors know there will be consequences for anyone who puts investors at risk.

Earlier this month we announced the largest civil money penalty in the history of the PCAOB – a $25 million fine against KPMG Netherlands for violations of PCAOB rules and quality control standards relating to exam cheating and misinforming investigators.

As of this month, the PCAOB has imposed $34 million in penalties in 2024, and we’ve only just begun.

We set a record in 2022. We broke that record in 2023. And we’ve already broken it again just four months into 2024.

Let this be a clear warning to those who break the rules – if you put investors at risk, there will be consequences.

With that, I will turn the meeting back over to Saba. Thank you again for your advocacy on behalf of the investors we serve. I look forward to hearing your presentations today.