The SEC approves rules the Public Company Accounting Oversight Board (PCAOB) proposed under the Sarbanes-Oxley Act of 2002 ( www.sec.gov/rules/pcaob/34-48180.htm ). They establish a registration system for public accounting firms seeking PCAOB permission to prepare or issue audit reports for publicly traded companies. Under the act, firms that do not register with the board by October 22 will not be permitted to render such audit services. (To meet the October deadline, firms had to have submitted their applications no later than the first week of September.)
The PCAOB begins notifying approximately 5,200 public companies and 3,300 mutual funds of what it will charge them each year in support of the board’s accounting oversight activities ( www.pcaobus.org/pcaob_news_8-04-03.asp ). Generally, what each company must pay corresponds to its average monthly capitalization, but those companies whose average monthly market capitalization does not exceed $25 million or mutual funds with an average monthly net asset value or market capitalization no greater than $250 million have no fees due. About 62% of stock issuers will pay no more than $1,000 in such fees to the PCAOB each year, and the largest 1,000 issuers will pay roughly 87% of the total due. The board also receives SEC approval of its $68 million budget for 2003.