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December 2, 2022

The PCAOB Thinks It Deserves a 12.6% Raise

These days everyone wants a raise that is at least as high as the rate of inflation, which is currently 7.75%. The PCAOB does too.

At an open meeting held today [Nov. 18], the Public Company Accounting Oversight Board approved its fiscal year 2023 budget and 2022-2026 strategic plan.

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The 2023 budget is guided by the strategic plan and provides the Board with the resources necessary to execute its goals to help keep investors protected. With core investments in people, processes, and technology, the budget is $349.5 million and provides funding for 926 positions.

 

The $349.5 million is $39.2 million more, or a 12.6% increase, than its fiscal 2022 budget of $310.2 million.

PCAOB Chair Erica Williams said this about the budget:

The 2023 budget provides those resources to allow us to effectively use the tools Congress gave the PCAOB under the law to advance our investor protection mission.

This budget provides for an increase in staff in our Office of the Chief Auditor to assist in the execution of our ambitious standard-setting agenda. As we advance our mission, it is imperative that we evaluate the standards that were adopted by the Board in 2003 on an interim basis to determine if changes are necessary to keep up with developments in the auditing profession and the capital markets.

Stakeholder feedback is also a critical component of standard setting. Therefore, this budget includes funding necessary to engage with our advisory groups on a regular basis throughout the year.

As it pertains to inspections, the budget provides resources that will allow us to enhance our work to assess whether accounting firms are complying with applicable laws, rules, and standards. As part of our inspection process, and consistent with our strategic plan, these resources will also assist us as we consider ways to provide greater transparency in our inspection reports, improve the timeliness of issuing such reports, identify opportunities to share useful guidance with the auditing profession, and increase our focus on firms’ remediation efforts.

From an enforcement perspective, there must be accountability for those who violate laws, rules, and standards. The budget provides us the resources to strengthen our enforcement program by using all the tools in our regulatory toolbox to conduct investigations and bring enforcement actions, to make sure the consequences are commensurate with the violations, to increase the transparency of our enforcement process where possible, and to work with other regulators as part of our enforcement efforts.

This budget also provides the resources necessary to improve the effectiveness of our organization. We would not be able to execute our mission without our talented staff, which is why this budget includes resources to enhance professional development, foster a diverse and inclusive workplace culture, and promote employee well-being. With these resources, we will also look for ways to improve our coordination across the organization and engage in more efficient decision making.

The PCAOB still needs to convince its bosses at the SEC that it’s deserving of a 12.6% raise in 2023. The SEC will likely rubber stamp that budget increase—followed by lots of “thank yous”—sometime in mid-December.

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