SEC May Reject PCAOB's Budget
The Public Company Accounting Oversight Board (PCAOB), which has requested $153 million, offers salary increases of 30 percent a year, according to a report by Bloomberg, which cited people familiar with the matter.
The PCAOB, formed in 2002 in the aftermath of massive corporate scandals and bankruptcies, is funded by publicly traded companies. The Sarbanes-Oxley Act gives the SEC the responsibility to approve the budget, which has more than doubled since the PCAOB's creation. The PCAOB oversees 1,400 accounting firms, employs 253 people and expects to hire 150 more staff next year.
PCAOB spokeswoman Christi Harlan told Bloomberg that she wasn't aware of the possibility that the SEC may not approve the group's budget. The board hasn't yet set staff salaries for next year, she said.
She added that critics “should be aware that Congress deliberately directed the PCAOB to pay a competitive salary with the marketplace. This is a very, very tight market for accountants.”
Auditors with eight to 10 years of experience can get paid at least $200,000 a year, said Paul R. Brown, an accounting professor at New York University's Stern School of Business.
SEC spokesman Matt Well would only say that the agency is “working very closely with the PCAOB on their budget.”
Some members of Congress have expressed concerns over the salaries at the PCAOB. Chairman William McDonough is paid $575,000, while the other four members earn $468,000. By contrast, SEC Chairman William Donaldson makes $145,600 a year; the four other commissioners make $135,900.
California Democratic Senator Barbara Boxer last year unsuccessfully tried to limit the board members' pay to $400,000 a year, the same salary paid to President George W. Bush.
Peter Wallison, a resident fellow at the American Enterprise Institute in Washington, suggested that the nonprofit PCAOB may have less incentive than a government agency to limit costs.
“I just don't see that there is any effective control over this organization,” he said.