The Public Company Accounting Oversight Board filed a motion to dismiss a constitutional challenge to its legality this week based on a number of procedural points.

In a U.S. District Court filing in Washington, the PCAOB said that the Free Enterprise Fund lacks legal standing because the anti-tax group didn't allege sufficient injury. The motion also alleges that the group failed to follow provisions of the Sarbanes-Oxley Act requiring board decisions to be appealed to the courts only after the Securities and Exchange Commission rejected the appeal.

"This court should not judicially imply a cause of action to bring suit in district court where Congress has provided an express statuary mechanism for review in the court of appeals," the motion, filed May 15, states.

The Free Enterprise Fund's lawsuit says that the PCAOB's structure violates the appointments clause of the Constitution. The five-member board is selected by the unanimous approval of the Securities and Exchange Commission, not by either the president -- which would require Senate approval -- or by the courts or a department head of an agency.

Bills have been floated in Congress to revise the Sarbanes-Oxley Act at a legislative level, but nothing is expected to pass during the current session. That prognosis may change in 2007, when the sponsors of the original legislation, Sen. Paul Sarbanes, D-Maryland, and Rep. Michael Oxley, R-Ohio, retire.

Previously on WebCPA:

Sarbanes Speaks Out Against SOX Rollback ( March 27, 2006)

Firm, Anti-Tax Group File Suit Against PCAOB ( Feb. 09, 2006)Case Coming over PCAOB Constitutionality ( Feb. 08, 2006)

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