This case clarifies PCAOB's authority, but also its ultimate accountability to Congress. PCAOB's strength is highlighted in this case by Judge [Robertson] pointing out that any violation of PCAOB rules "shall be treated ... as a violation of the Securities Exchange Act of 1934." However, it also highlights SECs "power to change, add to, or withdraw PCAOB rules at any time," suggesting room for input by business groups via Congress. For example, Section 404 of Sarbanes Oxley requires auditors to test managements' assessment of internal controls, and both the Democrat and Republican members of the Congress are pressuring to dilute this requirement on the grounds of making it more cost efficient for compliance. Aligning SECs guidance to management and PCAOB's auditing standards remains critical in enforcing compliance with SOX rules.

PCAOB has the authority to review accounting firms that audit public companies and disclose deficiencies, impose disciplinary actions and sanctions. However, these sanctions imposed by the PCAOB are generally stayed pending review by the SEC, which may alter or cancel the PCAOB-imposed sanctions. The Free Enterprise Fund v. The Public Company Accounting Oversight Board (PCAOB) case, clarifies PCAOB's authority, but also its ultimate accountability to Congress. PCAOB's strength is highlighted in this case by Judge Robertson pointing out that any violation of PCAOB rules shall be treated as a violation of the Securities Exchange Act of 1934.

Accounting firms
Federal court decisions
Review boards
Self regulation