SEC Approves 2021 PCAOB Budget and Accounting Support Fee

The Securities and Exchange Commission voted today to approve the 2021 budget of the Public Company Accounting Oversight Board (PCAOB) and the related annual accounting support fee.

The 2021 PCAOB budget totals $287.3 million, an increase of approximately 0.9% from its 2020 budget, and takes into account changes necessitated by the current telework environment such as a reduction on travel spending.  The accounting support fee totals $263.9 million, approximately 2.3% lower than the 2020 accounting support fee, of which $236.2 million will be assessed on public companies and $27.7 million will be assessed on registered broker-dealers.  The accounting support fee approximates the PCAOB’s annual budget, with differences generally attributable to certain timing differences in fee collections and PCAOB expenditures, adjustments to the working capital reserve, and the potential unspent funds from the prior year budget being carried forward into the accounting support fee calculation. 

The Sarbanes-Oxley Act of 2002, which established the PCAOB, provides the Commission with oversight responsibility over the PCAOB.  This includes reviewing and approving the PCAOB’s budget and accounting support fee annually.  In addition to the approval of the budget and the support fee, the Commission and the PCAOB coordinate on various matters, including standard setting, inspections and enforcement, principally through regular staff meetings as well as direct contact between the Commission and the PCAOB’s Board.

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FACT SHEET
Public Company Accounting Oversight Board 2021 Budget and Accounting Support Fee
December 17, 2020

Highlights

The Securities and Exchange Commission today voted to approve the 2021 budget of the Public Company Accounting Oversight Board (PCAOB) and the related annual accounting support fee.

On November 19, 2020, the PCAOB adopted its 2021 budget, accounting support fee, and its strategic plan for 2020-2024, including:

• A total budget of $287.3 million.
• An accounting support fee of $263.9 million, allocated as follows:
  • $236.2 million to be assessed on issuers; and
  • $27.7 million to be assessed on registered broker-dealers.

The PCAOB’s 2021 budget represents an increase of approximately 0.9% from its 2020 budget of $284.7 million, and takes into account changes necessitated by the current telework environment such as a reduction on travel spending. 

The 2021 budget will be funded primarily by the 2021 accounting support fee of $263.9 million, which is approximately 2.3 percent lower than the 2020 Commission-approved accounting support fee of $270.2 million.  

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 reviewing and approving the PCAOB’s budget and accounting support fee annually. 

Under Section 109 of the Sarbanes-Oxley Act of 2002, 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?

The PCAOB will proceed with issuing invoices to issuers and registered broker-dealers using the allocation above in accordance with the PCAOB’s funding rules.