NEW YORK, Jan 30 - The U.S. Securities and Exchange Commission on Friday announced the selection of new board members to lead the Public Company Accounting Oversight Board, the nonprofit body that oversees auditors of public companies.
The SEC said it has chosen Demetrios Logothetis, a retired auditor who spent four decades at Ernst & Young, to serve as chairman of the PCAOB. The board was created by Congress in response to major accounting scandals and auditing failures that contributed to the bankruptcies of Enron and WorldCom.
In its statement, the SEC also named Mark Calabria as one of the new board members. Calabria currently holds roles at the U.S. Office of Management and Budget and at the Consumer Financial Protection Bureau, the SEC said.
Two additional appointments announced by the Commission are Kyle Hauptman, who serves as chairman and the lone board member of the National Credit Union Administration, and Steven Laughton, a current PCAOB official. The SEC said longtime PCAOB official George Botic will remain in his capacity as Acting Chairman until Logothetis is officially sworn into the post.
The personnel changes follow the SEC's earlier removal of the PCAOB head that had been appointed under Democratic leadership. Commenting on the new appointments, SEC Chairman Paul Atkins said, "I am confident that this new Board will usher in a new day at the PCAOB - one of sensible, efficient oversight of auditors."
Those named to the board bring a combination of long auditing experience and current federal agency roles. The SEC framed the appointments as signaling a change in approach to oversight, though the agency provided no additional operational details on timing for transitions or specific policy changes.
Summary
The SEC has tapped Demetrios Logothetis as PCAOB chairman and added Mark Calabria, Kyle Hauptman, and Steven Laughton to the board roster. George Botic will serve as Acting Chairman until Logothetis is sworn in. The SEC described the new panel as bringing a focus on "sensible, efficient oversight."
Key Points
- Demetrios Logothetis, a retired EY auditor with four decades at the firm, was selected as PCAOB chairman.
- Mark Calabria, Kyle Hauptman, and Steven Laughton were also named to the PCAOB by the SEC; George Botic will remain Acting Chairman until the new chair is sworn in.
- The PCAOB was established by Congress after accounting and auditing failures that led to Enron and WorldCom bankruptcies; the SEC said the new board will focus on more efficient oversight of auditors.
Risks and Uncertainties
- Timing of the transition to the new chairman is not specified, leaving uncertainty about when leadership changes will take full effect - this could affect ongoing oversight activities in the auditing sector.
- The SEC did not outline concrete policy shifts tied to the new appointments, so the practical implications for audit regulation and compliance remain unclear - this uncertainty may influence audit firms and public companies that are subject to PCAOB oversight.
- Given the prior ouster of the PCAOB head appointed by Democratic leadership, there is potential for continued leadership turnover or policy shifts, which could affect stability in audit oversight governance.