The respondent, the Public Company Accounting Oversight Board, was created as part of a series of accounting

Question:

The respondent, the Public Company Accounting Oversight Board, was created as part of a series of accounting reforms in the Sarbanes-Oxley Act of 2002. The board is composed of five members appointed by the Securities and Exchange Commission (SEC). It was modeled on private self-regulatory organizations in the securities industry--such as the New York Stock Exchange--that investigate and discipline their own members subject to SEC oversight. Unlike these organizations, however, the board is a government-created entity with expansive powers to govern an entire industry. Every accounting firm that audits public companies under the securities laws must register with the board, pay it an annual fee, and com- ply with its rules and oversight. The board may inspect registered firms, initiate formal investigations, and issue severe sanctions in its disciplinary proceedings. The parties agree that the board is "part of the Government" for constitutional purposes. While the SEC has oversight of the board, it cannot remove board members at will but can do so only "for good cause shown," "in accordance with" specified procedures. The parties also agree that the commissioners, in turn, cannot themselves be removed by the president except for "inefficiency, neglect of duty, or malfeasance in office." The board inspected the petitioner accounting firm, released a report critical of its auditing procedures, and began a formal investigation. The firm and the petitioner Free Enterprise Fund, a nonprofit organization of which the firm is a member, sued the board and its members, seeking, inter alia, a declaratory judgment that the board is unconstitutional and an injunction preventing the board from exercising its powers. The petitioners argued that the Sarbanes- Oxley Act contravened the separation of powers by conferring executive power on board members without subjecting them to presidential control. Is the Public Company Accounting Oversight Board constitutional? Why or why not?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Dynamic Business Law The Essentials

ISBN: 978-0073524979

2nd edition

Authors: Nancy Kubasek, Neil Browne, Daniel Herron

Question Posted: