Washington, D.C., Aug. 4, 2003
The Public Company Accounting Oversight Board announced today that it has begun notifying publicly traded companies, investment companies and other equity issuers of the accounting support fees that they will pay to fund the operations of the PCAOB, as required by the Sarbanes-Oxley Act of 2002.
The Board's rules for the allocation, assessment and collection of accounting support fees were approved Friday by the U.S. Securities and Exchange Commission. The SEC also approved the Board's 2003 budget, previously set by the Board at $68 million.
About 5,200 publicly traded companies and about 3,300 investment companies will receive invoices for the accounting support fees due the PCAOB.
Under the Sarbanes-Oxley Act and the Board's rules, the annual accounting support fees are based on the average monthly U.S. equity market capitalization of publicly traded companies, investment companies and other equity issuers.
As a result, about 62 percent of issuers will pay $1,000 or less in accounting support fees to the PCAOB. The largest 1,000 issuers will pay about 87 percent of the total fees due.
"The bulk of our accounting support fees are assessed against the largest equity issuers," said PCAOB Chairman William J. McDonough. "Small companies need not be concerned about increased costs while they and their shareholders benefit from the PCAOB's attention to the quality of audits."
The fees will be paid by publicly traded companies with average monthly U.S. equity market capitalization of more than $25 million each. Similarly, the assessment of fees will be limited to investment companies with average monthly net asset value or U.S. equity market capitalization of more than $250 million each.
Publicly traded companies will together pay about 96 percent of the total fees due. About 3.5 percent will be collected from open-end mutual funds, and the remainder will be collected from other investment companies.
Under the Sarbanes-Oxley Act, the accounting support fees are due from each company 30 days after notice was sent. Companies that do not pay the fees are in violation of the Securities Exchange Act of 1934, which is enforced by the SEC.
The PCAOB is also notifying issuers of the fees due to support the operation of the Financial Accounting Standards Board. FASB selected the PCAOB to handle the collection of its support fees, as provided in the Sarbanes-Oxley Act. The fees due to FASB and the PCAOB are contained in separate notices.
Billing Inquiries: Lisa Landry