The Securities and Exchange Commission and the Department of Justice formally supported the constitutionality of the Public Company Accounting Oversight Board with the filing of a 46-page legal brief just before Labor Day.The brief outlined the government's arguments in support of the PCAOB's constitutionality, and was submitted in the U.S. District Court for the District of Columbia in a case brought by the Free Enterprise Fund in February.
Joined by small Las Vegas auditing firm Beckstead and Watts LLP, the anti-tax think tank has argued that the board's structure violates the appointments clause of the U.S. Constitution. The five-member board is selected by the unanimous approval of the SEC, not by either the president - which would require Senate approval - or by the courts or a department head of an agency. Secondly, the complaint accuses the PCAOB of taking away authority reserved for the executive branch of government.
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