PCAOB Proposes Amendments to Rule on Contributory Liability

The PCAOB has released a proposal that would “amend in two respects PCAOB Rule 3502, Responsibility Not to Knowingly or Recklessly Contribute to Violations, the Board’s rule governing the liability of associated persons who contribute to a registered public accounting firm’s primary violation.” Specifically, the proposal would:

• Enhance “accountability for those who put investors at risk by updating the threshold for liability.”
• Clarify “the relationship between the contributory actor and the primary violator.”

Comments on the proposal are due by November 3, 2023. For more information, see the press release — as well as the statements by PCAOB Chair Erica Williams and board members Duane DesParte, Christina Ho, Kara Stein, and Anthony Thompson — on the PCAOB’s Web site.