The PCAOB is exploring ways to make its standard-setting process more efficient, board Chairman James Doty said Wednesday during an open meeting of the SEC.
In December, SEC Chief Accountant James Schnurr said that there may be an underlying problem with the PCAOB’s standard-setting process that is preventing the board from moving projects forward in a timely and effective manner.
As the commission met and approved the PCAOB’s 2015 budget Wednesday, Doty said he has been meeting with Schnurr in an effort to improve the board’s standard-setting process.
“It is a rulemaking process,” Doty said. “There are a lot of perspectives, interests, and effects that have to be considered. But I agree that the process can be improved.”
The $250.9 million PCAOB budget, approved Wednesday by the SEC, funds a review of the board’s standard-setting agenda with an objective of identifying ways to conduct standard setting more efficiently.
The PCAOB considers extensive feedback during its standard-setting process, and it can take more than five years between the initial consideration of a standard and final issuance.
For example, a proposed standard on disclosing the engagement partner and certain other participants in audits, which is expected to be issued this year, was initiated with a concept release in July 2009.
At the meeting, the SEC voted to approve the PCAOB’s budget, which decreased about 3% from the 2014 budget, but increased 8% over the estimated $232.4 million the PCAOB actually spent in 2014.
The reduction from the 2014 budget reflects an assessment of assumptions related to personnel and other costs, based on a fairly competitive hiring market for experienced professionals, Doty said.
The 2015 accounting support fee of $226.6 million is about 10% lower than the 2014 accounting support fee. Public companies will be assessed $199.1 million for the accounting support fee in 2015, while registered broker-dealers will be assessed $27.5 million.
— Ken Tysiac is a JofA editorial director.