Former Free Enterprise Fund Official Reacts to Today’s Decision
Statement of Phil Kerpen, former executive director of the Free Enterprise Fund and current vice president for policy at Americans for Prosperity on today’s Supreme Court decision in Free Enterprise Fund v. PCAOB:
“Today’s decision in Free Enterprise Fund v. PCAOB is gratifying but insufficient. The Court recognized that the PCAOB was improperly constituted, because its members could not be removed and were therefore insulated from accountability. The tenure provisions were struck down. But by leaving in place the disastrous rules the Board was able to implement thanks to its unaccountability, the Court left American capital markets hamstrung.
“The staggering costs of Sarbanes-Oxley bear repeating. An analysis by Ivy Xiying Zhang of the University of Rochester measured the total stock market impact of the law at over $1 trillion. Nobel Laureate Milton Friedman told the New York Sun a couple of years ago that Sarbanes-Oxley was the biggest problem facing the U.S. economy, noting that it tells entrepreneurs: ‘Don’t take chances because down will come the hatchet. We’re going to knock your head off.’
“The most costly requirements are under section 404 of the act, which has been misinterpreted by the PCAOB as requiring full external audits of all internal control measures, despite the plain language of the law. This is a direct consequence of the un-Constitutional, unaccountable structure of the Board that the Court has now struck down. But the court left the audit requirements intact.
“Congress should therefore follow through with substantive reform including repealing section 404. And the lesson of the unconstitutional disaster Sarbanes-Oxley has been should give members of Congress another strong reason to vote no on Dodd-Frank.”
Join AFP
Donate to AFP
Take Action
Attend an Event
Find Your Legislator
