Erica Williams, a seasoned enforcement veteran with a background in dismantling Ponzi schemes and working closely with the Department of Justice, is shaking up the accounting industry as the first Black woman to chair the Public Company Accounting Oversight Board (PCAOB). Williams, who took the reins in 2022, has wasted no time in calling out what she has deemed a “completely unacceptable” rate of accounting errors in the industry.
Since her appointment, Williams has been on a mission to raise the bar on audit standards and reset the PCAOB’s checkered reputation. The PCAOB, long plagued by scandals and accusations of being too lenient on the firms it’s supposed to regulate, has seen a worrying trend of rising errors in audits. In fact, mistakes were found in 40% of the roughly 800 audits reviewed in recent inspection reports.
Williams, armed with a mandate to hold those putting investors at risk accountable, has not shied away from levying penalties on firms failing to meet audit quality standards. Her goal is deterrence, and she is determined to ensure that the industry is held to a higher standard.
The PCAOB, created in the aftermath of the Enron collapse to restore investor confidence in markets, has struggled to make a significant impact in its 20-year existence. The “Big Four” accounting firms—Deloitte, EY, KPMG, and PwC—have only grown in size and influence, raising concerns about potential conflicts of interest.
Under Williams’ leadership, the PCAOB is undergoing a transformation. With a focus on modernizing standards, enhancing audit inspections, and strengthening enforcement activities, Williams aims to bring greater transparency and accountability to the industry. The organization has expanded its reach to inspect China-based companies and has ramped up efforts to engage with the financial community through outreach initiatives and public roundtables.
While the road ahead may be challenging, Williams is unwavering in her commitment to ensuring that audit quality is not compromised. As she continues to push for change, the industry will be forced to reckon with a new era of accountability under her watch.