Jeanette M. Franzel, a managing director at the Government Accountability Office, will fill a vacancy on the Washington-based panel that oversees public- company auditors, the U.S. Securities and Exchange Commission said in a statement.
The commission chose Franzel to replace former acting chairman Daniel Goelzer, whose term on the Public Company Accounting Oversight Board expired late last year, the SEC said.
Franzel will join the five-member board March 1 as it weighs several major changes to core auditing rules, including increasing disclosures and forcing companies to rotate auditors.
“I’m really looking forward to having an opportunity to help the PCAOB advance its mission to protect investors and the public interest,” Franzel said in a telephone interview.
The panel, a nonprofit corporation created under the 2002 Sarbanes-Oxley Act to oversee auditors for U.S.-listed firms, has been pursuing several policy changes opposed by the industry. For instance, Ernst & Young LLP sent a letter to the board on Nov. 18 opposing the forced rotation of auditors, describing “many identifiable and known downsides to such a policy with little to no certain benefit.”
Franzel’s appointment was opposed by Commissioner Luis Aguilar, who said in a statement that the commission “failed to fulfill its legal obligation” to appoint a person with a commitment to investor advocacy.
“I believe the Commission is bound to appoint an individual whose actions, public statements, and reputation demonstrate a clear and steadfast advocacy of the rights and interests of investors,” Aguilar said. He said that in several comment letters to the board, Franzel didn’t mention investors.
In a statement, SEC Chairman Mary Schapiro said Franzel “has extensive hands-on experience leading financial audits and deep expertise in audit quality control which will serve the PCAOB well.”
Franzel’s department at the GAO took a public position against the forced rotation proposal in a letter dated Dec. 14.
“Even if the PCAOB could clearly establish that a lack of independence or objectivity is causing audit quality problems, it is unclear that such a problem would be prevented or mitigated by a mandatory audit firm rotation requirement,” the letter said.