Statement on the Commission’s Consideration of the Public Company Accounting Oversight Board’s Proposed 2014 Budget and Accounting Support Fee
Commissioner Kara M. Stein
Feb. 5, 2014
We are here today to help fulfill the Commission’s statutory obligation to approve the Public Company Accounting Oversight Board’s (“PCAOB” or “Board”) annual budget. When establishing the PCAOB in 2002, Congress vested the SEC with authority to review and approve the Board’s rules, standards, and budget.
It has only been eleven years since PCAOB opened its doors, and our role in ensuring its effective and efficient operations is more critical today than ever.
Public company auditors have long been relied upon to provide clear, independent and informative assessments of a company’s books, transaction records, and other documents to determine whether its financial statements can be relied upon by investors and others.
Over 80 years ago, the New York Stock Exchange mandated independent audits for all listed companies. While much has changed since 1932, the core requirement as set forth by the then- President of the American Institute of Certified Public Accountants (AICPA), Robert Montgomery, remains the same: the public accounting profession requires individuals “with indomitable courage to seek and tell the truth”.
As the PCAOB works to fulfill its mission to oversee the audits of public companies and broker-dealers, we need to ensure that it receives the appropriate funding it to do its job effectively. This is not only good for investors, but good for the entire financial services sector to have knowledgeable and skilled professionals providing efficient and effective oversight of this key gatekeeping function.
Shortly after the passage of the Securities Act, SEC Commissioner and a lead drafter of the Act, James Landis, offered his views that a public accountant should “[remember] always…that the public interest and the protection of investors must be the guiding consideration.” All of us – the Commission, the Board, and the public company auditors – continue to share this goal.
I want to extend my thanks to the team in the Office of the Chief Accountant that works every day with the PCAOB to help it best perform its critical mission, including Paul Beswick, Brian Croteau, Jeffrey Minton, Kevin Stout, Amy Stele, and Mark Jacoby, and to the team in our Office of Financial Management, Ken Johnson, Richard Taylor, and Nicole Puccio.
I also want to extend my thanks to Chairman James Doty for appearing here today and to the members and staff of the PCAOB for their hard work throughout the budget process.
 Congress has also passed laws that address the funding of Board activities, primarily through the annual accounting support fees assessed on public companies and on brokers and dealers. For example, Section 109 of the Sarbanes-Oxley Act of 2002 provides the mechanism of funding the PCAOB through an accounting support fee. Section 982 of the Dodd-Frank Wall Street Reform and Consumer Protection Act amended the Sarbanes Oxley Act to provide the PCAOB with explicit authority over the auditors of broker-dealers registered with the Commission.
 Walter A. Staub, Auditing Developments, p. 14.
 Robert H. Montgomery, What Have We Done, and How?, from the Fiftieth Anniversary Celebration of the American Institute of Certified Public Accountants, October 1937.
 J.M. Landis, Liability Sections of the Securities Act Authoritatively Discussed, an address before the Eleventh Annual Fall Conference of the NYS Society of CPAs, October 30, 1933.