The Securities and Exchange Commission voted today to approve the 2017 budget of the Public Company Accounting Oversight Board (PCAOB) and the related annual accounting support fee.
The PCAOB budget totals $268.5 million and will be funded by the collection of an accounting support fee totaling $268 million.
“The PCAOB’s mission to promote informative, accurate, and independent audit reports and to oversee auditors of public companies and SEC registered broker-dealers is critical to investor protection and our markets,” said SEC Chair Mary Jo White. “The 2017 budget provides the PCAOB with the funding necessary to continue to conduct inspections of auditors of U.S. public companies and broker-dealers, advance its research and standard-setting agendas, perform necessary economic and risk analysis, and conduct outreach. In furtherance of carrying out its mission in a cost-effective way, the PCAOB will undertake a study of operational efficiency and budgetary needs and submit a report to the Commission by mid-March next year.”
The Sarbanes-Oxley Act of 2002 established the PCAOB to oversee the audits and auditors of financial statements filed by public companies and registered broker-dealers. The Sarbanes-Oxley Act designated the SEC to oversee the PCAOB and specifies that the PCAOB’s budget and accounting support fee, which funds its operations, be subject to approval by the Commission.
The PCAOB budget includes:
- A 2017 budget of $268.5 million
- A 2017 accounting support fee totaling $268 million allocated as follows:
- $232.6 million to be assessed on public companies
- $35.4 million to be assessed on broker-dealers
The PCAOB’s 2017 budget represents an increase of approximately 4 percent from its 2016 budget of $257.7 million and an increase of approximately 6 percent over its estimated $252.8 million in spending in 2016. The 2017 accounting support fee of $268 million is approximately 6 percent higher than the 2016 accounting support fee of $253.3 million.
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Public Company Accounting Oversight Board 2017 Budget
and Accounting Support Fee
SEC Open Meeting
December 14, 2016
The Securities and Exchange Commission today will consider whether to approve the 2017 budget of the Public Company Accounting Oversight Board (PCAOB), and the related annual accounting support fee for the board, as required by the Sarbanes-Oxley Act of 2002.
On Nov. 17, 2016, the PCAOB adopted its 2017 budget and its strategic plan for 2016-2020. That proposed budget, which is now being considered by the SEC, includes:
- A proposed 2017 budget of $268.5 million
- A proposed 2017 accounting support fee totaling $268 million, allocated as follows:
- $232.6 million to be assessed on issuers
- $35.4 million to be assessed on registered broker-dealers.
The PCAOB’s 2017 budget represents an increase of approximately 4 percent over the 2016 Commission-approved budget of $257.7 million and an increase of approximately 6 percent over the PCAOB’s 2016 estimated spending of $252.8 million.
The 2017 budget will be funded primarily by the 2017 accounting support fee of $268.0 million, which is approximately 6 percent higher than the 2016 Commission-approved accounting support fee of $253.3 million. The increase in the accounting support fee relative to the increase in the budget primarily reflects the fact that there is less unused funding to be carried forward from FY 2016 to offset FY 2017 budgeted expenditures than was the case last year coupled with an increase to the reserve for the first 5 months of 2018.
The PCAOB oversees the audits and auditors of the financial statements that are filed by issuers and registered broker-dealers. The Sarbanes-Oxley Act of 2002, which established the PCAOB, provides the Commission with oversight responsibility over the PCAOB. This includes reviewing and approving the PCAOB’s budget and accounting support fee annually.
Under Section 109 of the Sarbanes-Oxley Act, the PCAOB is required to establish, with the approval of the Commission, a reasonable accounting support fee to fund its operations. The fee is assessed annually on issuers and registered broker-dealers. Consideration of the budget for approval is one of the many ways in which the Commission exercises its oversight responsibilities of the PCAOB.
If the PCAOB’s 2017 budget and accounting support fee are approved by the Commission, the PCAOB will proceed with issuing invoices to issuers and registered broker-dealers using the allocation described above in accordance with the PCAOB’s funding rules.