Statement at an Open Meeting of the Commission to Consider the Public Company Accounting Oversight Board’s Proposed 2014 Budget and Accounting Support Fee
Commissioner Daniel M. Gallagher
Feb. 5, 2014
The Sarbanes-Oxley Act requires that the Securities and Exchange Commission approve the PCAOB’s budget and accounting support fee.
And although, as I have pointed out each of the past two years, we could have approved the Board’s annual budget and accounting support fee in a non-public process, I do not believe that would have been appropriate. I am glad that we are again this year taking these matters up in an open meeting – this time under Chair White, the first such instance during her tenure.
Because Congress provided that the Board should be funded primarily through an accounting support fee, the congressional appropriations process, through which the Congress oversees and funds the SEC and many other Government departments and agencies, does not apply to the PCAOB. As a result, that process does not constrain the Board’s spending, nor guide its various activities. Congress decided that the Commission should serve that oversight function in Congress’s stead.
So it is the Commission that approves the accounting support fee to fund the Board, and the budget for the activities that fee will fund – and the Commission that must satisfy itself that the Board raises and spends its funds in the best interest of the investing public and, thereby, that of accounting profession as a whole. After all, PCAOB support fees, like many other regulatory fees, are ultimately paid by investors. For those reasons, I remain persuaded that it is important for the Commission to exercise its approval authority each year in the uniquely public manner that an open meeting affords us.
I should stress that this is not merely once-a-year, drop-by oversight. In executing our oversight role with respect to the PCAOB, we are ably assisted, day-in and day-out by our experienced staff in the Office of the Chief Accountant. We rely on them – and the PCAOB can be assured that we strongly endorse OCA’s ongoing oversight activities. In that connection, I want to note the perennially good work of Paul Beswick and Brian Croteau, in particular, as well as that of Ken Johnson, who heads our Office of Financial Management. And this year, in particular, I want to recognize the substantial assistance that our Division of Economic and Risk Analysis – Craig Lewis, Scott Bauguess, and Vanessa Countryman, in particular – have provided both to the PCAOB and to us in the PCAOB’s development of sound guidance for economic analysis.
Having reached the end of the review process for the PCAOB’s 2014 budget, OCA and the OFM recommend that the Commission approve the Board’s budget – and I am pleased once again to be able to play my part in doing so.
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In so doing, and pursuant to the oversight responsibility Congress and the Supreme Court have vested in us, I want to raise a few questions for Chairman Doty, one of our distinguished former colleagues.