How bad is the relationship between the Securities and Exchange Commission and the Public Company Accounting Oversight Board? What are the tensions? Can they actually work together to protect the markets?

Some valuable insights into these questions in this interview with former PCAOB member Kayla Gillan in Compliance Week. And it's not pretty.

According to Gillan, the SEC really pushed the PCAOB to water down standards, in particular the role of auditors in testing internal controls. The SEC, according to Gillan, wanted auditors to take a back seat and play less of a role.

"Some people at the SEC wanted the auditors to really only look at the process that companies go through to assess [internal controls] and not actually look at the controls themselves. That would have been in my mind not only a much narrower scope of review but potentially even a misleading opinion to investors. At one point they wanted auditors to only look at the denied controls and not whether or not they were actually operating effectively. At one point they wanted to really significantly reduce the amount of information the auditors were required to give to the audit committee on controls that were less than material weaknesses."

Gillan's comments say a lot about whether the SEC is serious about protecting investors. Clearly, the powers that be were on a mission to undermine the spirit and intention of Sarbanes-Oxley.

More to the point, it raises serious questions whether the SEC and PCAOB can work together to enforce Sarbanes-Oxley. But then maybe the bureaucratic arm-wrestle and power struggle was inevitable. When the PCAOB was created, it was taking over areas that had traditionally been the territory of the SEC. In that sense, all the SEC was doing was trying to reclaim lost ground. Pity investors would have paid the price had it been successful.