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Press Release


 
 

SEC Approves 2016 PCAOB Budget and Accounting Support Fee

FOR IMMEDIATE RELEASE
2016-51
Washington D.C., March 14, 2016

The Securities and Exchange Commission today approved the 2016 budget of the Public Company Accounting Oversight Board (PCAOB) and the related annual accounting support fee.

The PCAOB budget totals $257.7 million and will be funded primarily by the collection of an accounting support fee totaling $253.3 million and from the under-spending in 2015 that will be available to fund the 2016 budget.

“The PCAOB’s work to oversee auditors of public companies and SEC registered broker-dealers is critical to investor protection and our markets,” said SEC Chair Mary Jo White.  “The PCAOB has another busy year ahead as it continues to conduct inspections of auditors of issuers and broker-dealers, works to develop its permanent broker-dealer audit inspection program, and advances numerous standard-setting initiatives.   The Commission must continue to make sure the PCAOB has the necessary funds to fulfill all aspects of its important mission.”

The Sarbanes-Oxley Act of 2002 established the PCAOB to oversee the audits and auditors of financial statements filed by public companies and registered broker-dealers. The Sarbanes-Oxley Act designated the SEC to oversee the PCAOB and specifies that the PCAOB’s budget and accounting support fee, which funds its operations, be subject to approval by the Commission. 

The PCAOB budget includes:

  • A 2016 budget of $257.7 million
  • A 2016 accounting support fee totaling $253.3 million allocated as follows:

                  -$220.9 million to be assessed on public companies

                  -$  32.4 million to be assessed on broker-dealers               

The PCAOB’s 2016 budget represents an increase of approximately 3 percent from its 2015 budget of $250.9 million and an increase of approximately 5 percent over its estimated $244.9 million in spending in 2015.  The 2016 accounting support fee of $253.3 million is approximately 12 percent higher than the 2015 accounting support fee of $226.6 million.  The increase in the accounting support fee relative to the increase in the budget reflects the fact that there is less unused funding to be carried forward from FY 2015 to offset FY 2016 budgeted expenditures than was the case last year.

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FACT SHEET

Public Company Accounting Oversight Board 2016 Budget

and Accounting Support Fee

SEC Open Meeting

March 14, 2016

Action

The Securities and Exchange Commission today will consider whether to approve the 2016 budget of the Public Company Accounting Oversight Board (PCAOB), and the related annual accounting support fee for the board, as required by the Sarbanes-Oxley Act of 2002.

Highlights

On Nov. 24, 2015, the PCAOB approved its 2016 budget and its strategic plan during an open meeting of the board.  That proposed budget, which is now being considered by the SEC, includes:

  • A proposed 2016 budget of $257.7 million
  • A proposed 2016 accounting support fee totaling $253.3 million, allocated as follows:
    • $220.9 million to be assessed on issuers
    • $32.4 million to be assessed on registered broker-dealers.

The PCAOB’s 2016 budget represents an increase of approximately 3 percent over the 2015 Commission-approved budget of $250.9 million and an increase of approximately 5 percent over the PCAOB’s 2015 estimated spending of $244.9 million.

The 2016 budget will be funded primarily by the 2016 accounting support fee of $253.3 million, which is approximately 12 percent higher than the 2015 Commission-approved accounting support fee of $226.6 million.  The increase in the accounting support fee relative to the increase in the budget reflects the fact that there is less unused funding to be carried forward from FY 2015 to offset FY 2016 budgeted expenditures than was the case last year.

Background

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 registered broker-dealers.  Consideration of the budget for approval is one of the many ways in which the Commission exercises its oversight responsibilities of the PCAOB.

What’s Next?

If the PCAOB’s 2016 budget and accounting support fee are approved by the Commission, the PCAOB will proceed with its process of determining issuer and registered broker-dealer allocations of the 2016 accounting support fee and issue invoices to issuers and registered broker-dealers based on the PCAOB’s funding rules.    

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