S 2919119th CongressIn Committee

PCAOB Enforcement Transparency Act of 2025

Introduced: Sep 19, 2025

Sponsor: Sen. Reed, Jack [D-RI] (D-Rhode Island)

Financial Services

Standard Summary

Comprehensive overview in 1-2 paragraphs

This bill, titled the PCAOB Enforcement Transparency Act of 2025, would amend the Sarbanes-Oxley Act of 2002 to increase public access to the Public Company Accounting Oversight Board’s (PCAOB) disciplinary process. The key changes are: (1) disciplinary hearings conducted under SOX would be open to the public by default, with the PCAOB allowed to close a hearing only upon its own motion or after considering a party’s request; and (2) the publication of PCAOB disciplinary determinations would occur without the previous requirement that stays on sanctions be lifted first. In short, the bill pushes for greater transparency in both hearings and resulting enforcement actions, subject to potential limited exceptions. The bill carries a short title of the "PCAOB Enforcement Transparency Act of 2025" and, as introduced, sets these changes within the PCAOB’s enforcement framework under SOX Section 105. It does not provide a specified effective date in the text provided, and it lists the sponsors as Senators Reed and Grassley, with referral to the Senate Committee on Banking, Housing, and Urban Affairs.

Key Points

1Open hearings by default: Hearings under Section 105 would be open to the public unless the PCAOB, on its own motion or after considering a party’s motion, orders otherwise. This creates a presumption of transparency for disciplinary proceedings.
2Public access to determinations: The requirement that the publication of disciplinary determinations occur only after a stay is lifted is removed, meaning determinations can be published without waiting for any stay to end, enhancing public visibility into outcomes.
3Short title: The bill is named the PCAOB Enforcement Transparency Act of 2025.
4Substantive scope: Changes apply to disciplinary proceedings under the Sarbanes-Oxley Act as administered by the PCAOB, affecting how hearings and sanctions are disclosed.
5Procedural clarity: The amendments specify openness as the default, with a defined path for private/closed proceedings if the Board determines it is necessary, balancing transparency with potential due process or safety considerations.

Impact Areas

Primary group/area affected- Investors and financial markets: Increased transparency could improve investor understanding of enforcement actions and firm risk profiles.- Public companies and registered audit firms: Greater visibility into PCAOB proceedings and outcomes may affect corporate governance practices and reputational considerations.Secondary group/area affected- Auditors and accounting professionals: Public proceedings and determinations may influence behavior, compliance focus, and risk management.- Media and watchdog groups: Easier access to hearings and determinations could facilitate reporting and oversight.Additional impacts- Regulatory and enforcement culture: By defaulting to open hearings and determinations, the PCAOB’s enforcement posture may become more transparent, potentially affecting deterrence and public trust.- Due process considerations: While transparency increases, there may be concerns about privacy, safety, or the potential chilling effect on participants in ongoing investigations; the bill preserves a mechanism for closing a hearing if warranted.- Administrative and operational effects: Implementing open hearings and timely publication may require adjustments to PCAOB processes, record-keeping, and communications strategies.

Generated by gpt-5-nano on Oct 8, 2025