In a case that carries the potential to reshape the regulatory landscape of the accounting profession, the U.S. Supreme Court last month heard oral arguments in a lawsuit challenging the constitutionality of the Public Company Accounting Oversight Board - with several justices appearing to take the plaintiffs' side in the case.
The case, Free Enterprise Fund v. Public Company Accounting Oversight Board, was brought on behalf of a small Nevada accounting firm, Beckstead & Watts, which challenged the constitutionality of the law after objecting to the PCAOB's inspection findings on a number of its audit reports.
The Free Enterprise Fund, a conservative group opposed to government regulation, had lost the case before both a district judge and an appeals court. But if it wins before the Supreme Court, the ruling could have wide-ranging implications not only for the PCAOB and its oversight of public accounting firms, but also for the law that established the board: the Sarbanes-Oxley Act of 2002.
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