D.C. Circuit Upholds Federal Auditing Board

     WASHINGTON (CN) – The D.C. Circuit rejected a challenge to the Public Company Accounting Oversight Board, ruling that the board does not have too much power because its members can be removed by the Securities and Exchange Commission.

     The Free Enterprise Fund and Beckstead & Watts LLP challenged the constitutionality of the Sarbanes-Oxley Act of 2002, which created the board in response to the Enron and WorldCom scandals.
     They argued that the act violated the separation of powers doctrine because the president does not have the power to remove board members.
     Judge Rogers ruled that the president has more important things to do.
     “Board members are subject to the direction and supervision of the (SEC), and thus are inferior officers not required to be appointed by the president,” Rogers wrote.

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