U.S. SEC chair to hold off on appointing new top audit watchdog

WASHINGTON (Reuters) - U.S. Securities and Exchange Commission Chair Mary Jo White intends to wait until the agency once again has a full five-member panel before moving forward to appoint a new top audit watchdog, she said on Friday.

“The appointment/reappointment process is one that I think should be left to the full commission,” White told reporters on the sidelines of the Practising Law Institute’s annual “SEC Speaks” conference.

There has been a growing controversy over the past year on whom the SEC should tap to lead the Public Company Accounting Oversight Board, a body created in the wake of the Enron scandal to police corporate auditors.

The choice of a leader for the PCAOB will help determine the fate of a variety of reforms that have been deliberated at the PCAOB in recent years.

Current PCAOB Chairman James Doty, whose term expired last fall, has championed those reforms.

Doty’s regulatory agenda has been controversial. Some of the ideas he has pushed for include cracking down on conflicts and holding audit partners more accountable for their work.

His efforts have won him praise from consumer rights groups but criticism from audit firms and many Republicans in Congress.

The issue has also divided the SEC.

Last fall, Reuters reported that the SEC was considering three possible candidates for chairman - Doty, PCAOB board member Lewis Ferguson and William Duhnke, the Republican staff director and general counsel for the Senate Banking Committee.

SEC commissioners at the time were at loggerheads over who should be selected.

The challenge of getting a consensus has only since grown more difficult after Republican Commissioner Daniel Gallagher and Democratic Commissioner Luis Aguilar stepped down late last year.

Now only three SEC commissioners remain. Kara Stein is a Democrat; Mike Piwowar, a Republican; and White, an independent.

President Barack Obama last fall nominated two new SEC commissioners to replace Gallagher and Aguilar, but the Senate Banking Committee has not held a confirmation hearing. When the Senate will act on the nominations is unclear.

Until the SEC is back to a full five-member commission, White said, the PCAOB will continue with business as usual.

“Chairman Doty and the PCAOB board and staff are carrying out their duties and critical missions without missing a beat,” White said. (Reporting by Suzanne Barlyn and Sarah N. Lynch)