On February 13, 2013, the Securities and Exchange Commission (SEC) unanimously approved the 2013 budget of the Public Company Accounting Oversight Board (PCAOB) and the related annual accounting support fee as required by the Sarbanes-Oxley Act of 2002.
The PCAOB budget totals $245.6 million and will be funded primarily by the collection of an accounting support fee totaling $234 million.
"It is critical that the PCAOB has the resources it needs to get the job done", said SEC Chairman Elisse B. Walter. "This budget review and approval process allows the SEC to determine appropriate funding levels and ensure that funds collected from issuers and broker-dealers are used efficiently and effectively."
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 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 SEC-registered broker-dealers. Consideration of the budget for approval is one on the many ways in which the Commission exercises its oversight responsibilities of the PCAOB.
Highlights of the PCAOB's Proposed 2013 Budget and Accounting Support Fee
The PCAOB approved its 2013 budget and accounting support fee in November 2012 during an open meeting of the Board. That budget, now also approved by the SEC, includes:
- A proposed 2013 budget of $245.6 million
- A proposed 2013 accounting support fee totaling $234 million allocated as follows:
- $207.5 million to be assessed on issuers
- $26.5 million to be assessed on broker-dealers
The PCAOB's 2013 budget represents an increase of approximately 8 percent over its 2012 budget of $227.7 million. The increase is primarily attributable to an increase in the PCAOB's audit inspections program, including additional staff to:
- Perform inspections of audits of SEC-registered broker-dealers (a class of audits overseen by the PCAOB as a result of the Dodd-Frank Act).
- Perform international inspections.
- Implement planned improvements to the PCAOB's inspections program, including the reporting and processes for assessing quality control remediation efforts.
The 2013 budget will be funded mostly by the 2013 accounting support fee of $234 million, which is approximately 9 percent higher than the 2012 accounting support fee of $215 million.
Source: February 13, 2013, SEC Press Release