On December 7, the U.S. Supreme Court will hear arguments in a case which challenges the constitutionality of the Public Company Accounting Oversight Board (PCAOB); the organization responsible for determining policy, and enforcement of the Sarbanes-Oxley Act.
The plaintiffs in the case (Free Enterprise Fund v.Public Company Oversight Board) assert that the PCAOB, while characterized as a private corporation, exercises broad governmental powers including policy creation and compliance enforcement; in effect, making it a government agency subject to Presidential oversight and control.
While the case is not likely to be the downfall of Sarbanes-Oxley, but some form of change seem to be on the horizon for the legislation. An amendment currently in the House Financial Services Committee would permanently exempt small publicly traded companies from the attestation requirement of Section 404 of the Sarbanes-Oxley Act.
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