PCAOB Begins Collecting Fees to Fund Its Operations
The bill is in the mail. The Public Company Accounting Oversight Board (PCAOB) has begun mailing invoices to the nation’s 5,200 publicly held companies as well as another 3,300 investment firms and issuers of equity, all of whom will foot the bill for the board’s $68 million operating budget.
Created by the Sarbanes-Oxley Act of 2002, the PCAOB was created to oversee the audits of publicly traded companies.
In an announcement on its Web site, the PCAOB outlined how the fees were determined: Under the Sarbanes-Oxley Act and the Board's rules, the annual accounting support fees are based on the average monthly U.S. equity market capitalization of publicly traded companies, investment companies and other equity issuers. So, about 62 percent of issuers will pay $1,000 or less in accounting support fees to the PCAOB and the largest 1,000 issuers will pay about 87 percent of the total fees due.
"The bulk of our accounting support fees are assessed against the largest equity issuers," said PCAOB Chairman William J. McDonough, in the same announcement. "Small companies need not be concerned about increased costs while they and their shareholders benefit from the PCAOB's attention to the quality of audits."
The site reported that public companies with U.S. equity market capitalization of more than $25 million each would pay the fees with fee assessment confined to companies with "average monthly net asset value or U.S. equity market capitalization of more than $250 million each."
The PCAOB expects that publicly traded companies combined will pay about 96 percent of the fees with 3.5 percent coming from open-end mutual funds and the rest from investment firms.
Sarbanes-Oxley gives the firms billed 30 days from receipt of the invoice to pay the fees and those that fail to pay will be in violation of the 1934 Securities and Exchange Act, which is overseen by the SEC.