PCAOB Wins Case Against Two Auditors Challenging Disciplinary Proceedings

The Public Company Accounting Oversight Board won a consolidated case brought by two plaintiffs, Doe 1 and Doe 2, who were auditors at different firms. The plaintiffs argued that the PCAOB's disciplinary proceedings violated several constitutional rights, including the Seventh Amendment right to a jury trial and the Due Process Clause of the Fifth Amendment. The PCAOB had instituted disciplinary proceedings against Doe 1 for improperly modifying audit documents and misleading inspectors, and against Doe 2 for failing to adequately evaluate significant accounting estimates during a 2018 audit.

The ruling addresses the scope of the Public Company Accounting Oversight Board's regulatory authority over the auditing profession. The PCAOB is responsible for overseeing the audits of public companies. The outcome of this case may influence how the PCAOB conducts and enforces its disciplinary actions against auditors.