The SEC approved a $257.7 million budget for the PCAOB for 2016 on Monday that represented an increase of 2.7% over the previous year.
The PCAOB’s budget will mostly be paid for with an accounting support fee totaling $253.3 million. Public companies will be assessed $220.9 million and broker-dealers $32.4 million to reach that total.
On a three-member SEC panel, Chair Mary Jo White and Kara Stein supported the budget. Two SEC seats currently are unfilled.
“The PCAOB has another busy year ahead as it continues to conduct inspections of auditors and broker-dealers, works to develop its permanent broker-dealer audit inspection program, and advances numerous standard-setting initiatives,” White said in a news release. “The commission must continue to make sure the PCAOB has the necessary funds to fulfill all aspects of its important mission.”
Commissioner Michael Piwowar voted against the budget. He said the accounting support fee was too high. The accounting support fee was 12% higher than in 2015, in part because there is less unused funding from 2015 to carry over into 2016 than there was the previous year.
“Five years ago, the board spent $190 million,” Piwowar said in a statement released by the SEC. “Today’s request approaches nearly $258 million and a 12% increase in the 2015 accounting support fee from $227 million. Simply stated, a more modest budget should have been presented for 2016.”
PCAOB Chairman James Doty said the board’s plans include:
- Enhancing the relevance and reliability of audits through projects on the auditor’s reporting model and the auditor’s role in validating fair value measurements.
- Studying the implication of the growth of consulting practices on auditor independence and audit quality.
- Continuing to monitor the increasing use of audit quality indicators by audit committees and others, testing the indicators that appear to be most promising.
“At the same time that we protect investors’ interests in striving to achieve more reliable audits, we also need to consider how to strengthen the audit’s value to stakeholders,” Doty said. “The needs of both markets and investors change. We must advance the audit process to meet those needs.”
—Ken Tysiac (email@example.com) is a JofA editorial director.