PCAOB Audit Chief Thomas Ray Steps Down

Ray helped design the Public Company Accounting Oversight Board's controversial original internal-controls standard.
David KatzFebruary 27, 2009

Thomas Ray, chief auditor and professional-standards director of the Public Company Accounting Oversight Board, will step down March 6 to return to the private sector, according to the PCAOB.

Ray was one of the board’s first professional staff members, having joined as deputy chief auditor in June 2003, soon after the PCAOB began operating. He played a key role in setting up the office of the chief auditor for the first incumbent, Douglas Carmichael, and was the board’s first deputy chief auditor. Ray was named chief auditor in February 2006.

Ray helped design board audit standards aimed at enabling public accountants to comply with Section 404 of the Sarbanes-Oxley Act of 2002, according to the board’s press release on his departure. That provision requires public companies to obtain audits of the effectiveness of their internal controls over financial reporting.

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Originally called AS No. 2, the standard, along with Section 404, proved to be controversial. Executives, especially those working for small companies, complained that the provisions were too costly and burdensome. During Ray’s tenure, the audit standard was replaced by AS No. 5, another internal-controls standard that has drawn less controversy.   

Before joining the PCAOB, which was enacted by Sarbox in 2002 to oversee public accounting firms, Ray was a partner at KPMG LLP. Prior to that, he was director of auditing standards at the American Institute of Certified Public Accountants. The PCAOB’s first mission was to take over control of auditing standards from the AICPA.

Ray began his public accounting career with Grant Thornton LLP. Jennifer Rand, his deputy, will serve as acting chief auditor until a permanent appointment is made, according to the board.