The former chief accountant at the SEC called the Big 4 audit firms an “oligopoly” and suggested that competition has only lessened over the years.
“I don’t see that much is going to be done on competition unless there’s some fundamental changes made, or determined to be made, by the government,” said Lynn Turner, now a senior advisor at Hemming | Morse, during a Sept. 9 webcast discussion on competition and regulatory reform at the PCAOB, CFO Dive reported.
Speaking before the SEC’s Investor Advisory Committee, Turner asserted that auditors are not putting investors first. The SEC oversees PCAOB, created as part of the Sarbanes-Oxley corporate reform legislation in 2002. In turn, the PCAOB oversees public audits.
“We’ve got to change the culture in the firms where they view the investors as the ultimate client, not the management team who’s paying them,” Turner told the advisory committee, according to CFO Dive. “Let’s give the investors more power and make the auditor beholden to the investor.”
He added, “We’ve got to go to more of a market-based, investor-driven process if we’re going to get this fixed. Otherwise, I think we’ll continue to flop around like a fish on the beach, and just not make any real progress.”
Turner’s comments came amid a flurry of changes to the PCAOB under SEC Chairman Gary Gensler, who ousted the chair, William Duhnke III, in June. In his place, he appointed board member Duane DesParte as acting chair, but he is expected to step down soon. The SEC is seeking applicants for the other four board seats.
Duhnke led the Trump-era board that came under heavy criticism for ordering fewer enforcement actions, firing senior staff and failing to convene meetings of advisory groups. Gensler has pledged to “take a new direction and reinvigorate” the board.