Wednesday, June 07, 2006

Judge to soon hear motion to dismiss PCAOB, Sarbanes-Oxley suit

A federal judge will hear arguments on June 29 on whether to dismiss a lawsuit filed by a conservative think tank that seeks to declare unconstitutional a U.S. audit watchdog agency, a lawyer in the case said on Wednesday.

The Public Company Accounting Oversight Board (PCAOB) was created in 2002 to police the formerly self-regulated audit business dominated by the Big Four accounting firms. The post-Enron Sarbanes-Oxley laws that created the PCAOB also require U.S.-traded companies to disclose more about their internal controls and how they keep their books in order.

Michael Carvin, an attorney for the think tank, the Free Enterprise Fund, said he does not believe the Bush administration's recent statement of support for dismissal of the lawsuit will have bearing on the case.

The U.S. Department of Justice filed a "statement of interest" last week, saying the lawsuit was filed "at the wrong time, in the wrong court" and should be dismissed. It said a challenge to the constitutionality of PCAOB must first be reviewed by the U.S. Securities and Exchange Commission.

"They're weighing in on arcane jurisdiction questions where they have no expertise," Carvin said. "We're using the procedure that everyone arguing about constitutional violations uses."

Judge to soon hear motion to dismiss PCAOB, Sarbanes-Oxley suit

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