Bill Overview
Title: PCAOB Whistleblower Protection Act of 2022
Description: This bill establishes a whistleblower protection program at the Public Company Accounting Oversight Board (PCAOB). Specifically, individuals reporting information to the PCAOB regarding securities law violations relating to audits (1) are protected from retaliation by an employer, and (2) could be eligible for a monetary reward. The reward program applies to individuals who voluntarily report original information that results in the PCAOB imposing civil penalties exceeding $250,000.
Sponsors: Rep. Garcia, Sylvia R. [D-TX-29]
Target Audience
Population: Employees and stakeholders in companies subject to PCAOB oversight
Estimated Size: 500000
- The PCAOB is an oversight body that regulates the audits of public companies. This means most public companies operating in the U.S. and some international entities engaged with U.S. markets might be impacted.
- Employees of public accounting firms working with clients that are subject to the PCAOB's regulatory authority would be directly impacted by this legislation.
- Company employees who observe and report on securities law violations during audits will be protected under this act.
- Historically, audit professionals and related financial personnel fall under the purview of the PCAOB, and therefore could number in the hundreds of thousands globally given the scale of international public companies with U.S. ties.
- The PCAOB's impact is primarily on U.S. listed public companies, but also on international companies with significant U.S. presence, broadening the affected population globally.
Reasoning
- The PCAOB Whistleblower Protection Act of 2022 is anticipated to primarily affect employees within public accounting firms, auditors, and financial professionals involved in regulatory compliance for public companies subject to PCAOB oversight.
- The budget constraints suggest a limited initial reach, focusing on a significant but not all-encompassing part of the target population. Its influence will likely grow over time with increasing awareness and adaptation among the affected individuals.
- Anticipated impacts include improved workplace security for whistleblowers and potential financial rewards, however, the latter will likely only be relevant to a small subset of individuals resulting in significant cases.
- Many employees in these sectors may not directly experience notable changes unless they are directly engaged in activities related to reporting or are aware of violations.
Simulated Interviews
Senior Auditor (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- The policy is a positive step towards ensuring that issues are reported without fear of retaliation.
- I know colleagues who might benefit greatly from these protections.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Compliance Officer (San Francisco, CA)
Age: 30 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 12/20
Statement of Opinion:
- This policy might help foster a more open culture around compliance issues.
- I'm concerned that the rewards might not be significant enough to deter corporate retaliation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Financial Analyst (Chicago, IL)
Age: 50 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 14/20
Statement of Opinion:
- I don't expect this policy to affect my day-to-day work.
- It seems like a safeguard for those directly involved in audits.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Junior Accountant (Austin, TX)
Age: 27 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 13/20
Statement of Opinion:
- This is encouraging for newcomers like me, knowing there's a layer of protection when dealing with sensitive information.
- I view the potential rewards as an incentive, though not a primary driver in reporting violations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Audit Consultant (Boston, MA)
Age: 38 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 8/20
Statement of Opinion:
- Policy won't affect me significantly unless I engage with firms directly regulated by PCAOB.
- It adds an extra layer of trust in delivering audit suggestions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
CFO (Dallas, TX)
Age: 52 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- The protection is useful for our audit teams, ensuring we adhere to best practices.
- We need to manage any potential fallout from whistleblower cases carefully.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Audit Manager (Seattle, WA)
Age: 42 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 11/20
Statement of Opinion:
- Our firm welcomes this act as it aligns with our internal values on transparency.
- I foresee minimal impacts on our current operations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Internal Auditor (Miami, FL)
Age: 29 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 6.0 years
Commonness: 9/20
Statement of Opinion:
- This bill reassures me about the ability to report issues without fearing for my job.
- I think the rewards portion may encourage more prompt reporting from those on the ground.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 5 |
Retired Corporate Lawyer (Phoenix, AZ)
Age: 65 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 7/20
Statement of Opinion:
- This policy will certainly impact my former colleagues and clients, though not myself directly now.
- Important guardrails for ensuring compliance integrity.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Forensic Accountant (Philadelphia, PA)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 13/20
Statement of Opinion:
- The policy is aligned with practices already encouraged within our firm.
- Monetary rewards might motivate reports beyond what is seen as regular duties.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Cost Estimates
Year 1: $15000000 (Low: $10000000, High: $20000000)
Year 2: $15500000 (Low: $10500000, High: $20500000)
Year 3: $16000000 (Low: $11000000, High: $21000000)
Year 5: $17000000 (Low: $12000000, High: $22000000)
Year 10: $19000000 (Low: $14000000, High: $24000000)
Year 100: $25000000 (Low: $20000000, High: $30000000)
Key Considerations
- The extent of the whistleblower program's success will depend on the level of participation and effectiveness in uncovering violations.
- The scale of rewards and protection will influence the program's attractiveness to potential whistleblowers.
- Potential legal challenges from companies disputing penalties could affect program efficiency.