PCAOB Budget Projects Staff Increase of 39

The Public Company Accounting Oversight Board (PCAOB) submitted a 2007 budget proposal of $136.4 million, which would be an increase of $5.5 million or about a half a percent over the current budget.


Advertisement


Mastering the New Federal Schedule M-3:
Staying ahead of the government’s demands for more data

A 100-Minute Telephone Conference
with a Live Interactive Q&A Session
Wednesday, December 13, 2006
1:00-2:30 pm Eastern

Register online
More information

Mention Program Code ACCWEB.
Earn CPE while you listen.

Presented by State Income Tax Monitor, Tax Incentives Alert and Sales & Use Tax Monitor, and the Legal Publishing Group of Strafford Publications.


The budget for calendar year 2007 is subject to approval by the Securities and Exchange Commission (SEC), which will consider the proposal at its meeting December 4.

As required by the Sarbanes-Oxley Act of 2002, the board’s budget, less registration fees collected from accounting firms in 2006, will form the basis for 2007 assessments of accounting support fees, a statement from the PCAOB said. The board will also use working capital reserves to reduce the overall 2007 accounting support fee by $10 million. The 2007 budget projects that the PCAOB will assess $122.4 million in accounting support fees next year.

The PCAOB is the private-sector, non-profit corporation, created by the Sarbanes-Oxley (SOX) to oversee the auditors of public companies. Most of the budget is allocated to personnel costs and technology,

Personnel costs are over 71 percent of the 2007 budget. “Attracting, compensating, and retaining talented people, particularly auditors, require significant resources,” board member Daniel L. Goelzer wrote in a budget statement.

The PCAOB projects a total staff of 519 by the end of 2007. Of those, approximately 250 would be inspections staff, the board said. This compares to an estimated total headcount of 480, with an inspections staff of 230, ending 2006.

The inspection program is by far the greatest expense. Of the proposed $136.4 million, $55.7 million would be allocated to the Division of Registration and Inspections. Other categories, such as information technology, are support inspections, Goelzer’s statement said.

PCAOB board member Charles D. Niemeier said that the SOX inspections are making an impact. “After four years of inspections of the largest firms, we have seen significant changes in auditors’ attitudes toward their accountability,” he said.

“I have heard from numerous auditors who, with the support of their firms, say they are auditing better than ever before. This is in part because auditors understand that their work is much more likely to be reviewed, either by the PCAOB’s inspectors or by their firm’s internal reviewers, who in turn are judged in our inspections each year.”

Technology is the second-largest line item in the PCAOB 2007 budget, at $23.3 million. “Public company auditing increasingly takes place in an electronic, rather than a paper, world, and sophisticated use of technology offers us opportunities to do our work more efficiently and effectively,” Goelzer said. “However, cutting edge IT support does not come cheap.”

Goelzer expects the SEC to approve the budget at the December 4 meeting, noting that the process was substantially smoother this year. “In 2006, we were still responding to SEC questions about the budget well into the New Year, and the Commission didn’t actually approve the 2006 budget until April 13,” he said.

Niemeier and Goelzer credit the improved budget process to the new budget officer position, which was filled by Bill Wiggins, formerly of the SEC staff. “This year, there has been closer dialogue,” Goelzer said.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Upcoming CPE Webinars

Apr 17
In this exciting presentation Excel expert David H. Ringstrom, CPA shares tricks that you can use with pivot tables every day. Remember, either you work Excel, or it works you!
Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.