The SEC's PCAOB "budget rule", which describes the process by which the Commission reviews and approves the Board's annual budgets, requires that the Board maintain a five-year strategic plan setting forth the Board's long-range vision for its operations. Each fall, in conjunction with approving the budget for the coming year, the Board reassesses its objectives, and how it is seeking to accomplish them. Based on that review, we update the strategic plan. Approving a new blueprint for the coming five years in tandem with the annual budget promotes alignment between the plan and the budget and forces the Board to think strategically about what it is trying to accomplish with its resources.
Those who compare the 2010-2014 plan to its predecessor will note some key changes. Last year's plan was organized around five goals. The new version is more streamlined and has condensed the goals to four. In brief, those goals are —
First, this year's plan incorporates Congress' decision in the Dodd-Frank Act to broaden the Board's responsibilities by giving it new authority over auditors of securities broker-dealers. This added responsibility will require us to expand the PCAOB's inspections, enforcement, and standard-setting programs. The strategic plan, beginning with the statement of the Board's mission, has been revised to take into account these new challenges. Goal 2 focuses specifically on this area. The objectives and initiatives under that goal provide a framework for accomplishing the new tasks Congress has given the Board.
Second, we have eliminated what was previously Goal 4. That goal related to coordination of financial reporting and auditing initiatives in the U.S. and other jurisdictions. The disappearance of old Goal 4 does not mean that coordination with other audit oversight bodies and standard-setters is no longer important. On the contrary, working with other standard-setters and coordinating with our foreign counterparts continue to be central to successful oversight. This effort is, however, best viewed through the lens of the Board's basic mission of protecting investor interests in public company and broker-dealer auditing, rather than as something separate. The objectives of old Goal 4 have been folded into initiatives under other goals.
Third, the initiatives under Goal 3, which relates to Board outreach and education, have been expanded. For the past several years, the Board has conducted a series of very successful forums on auditing in the small business environment as outreach to the small business community. However, during the legislative debate leading up to the enactment of Dodd-Frank, there was interest in making sure that the Board had open lines of two-way communication with those affected by its work, particularly small firms. In response, this year's strategic plan reflects an expanded commitment to seek input, and to respond to questions and concerns, relating to the effect of the PCAOB's work on the small business community, including auditors of smaller issuers and broker-dealers and their clients.
Fourth, while the environmental factors outlined in the plan are largely unchanged from last year, we have added references to broker-dealer auditing in light of the Dodd-Frank legislation and to the pace of accounting standard-setting. Rapid changes in accounting standards, especially a shift to more principles-based standards, increase audit challenges, as well as challenges to our inspection program.
I want to conclude by emphasizing — as I did last year — that the strategic plan does not in any way constrain future Board decision-making. The Commission is in the process of selecting three new Board members. These individuals will constitute a new Board majority and may bring with them new ideas concerning the Board's goals, objectives, and initiatives. This plan is intended to be flexible, and nothing in it limits the next Board's choices. Further, our strategic planning process is a continual and iterative process. That process will start again in January when the Board begins the annual reevaluation of its goals and the formulation of its 2012 budget.
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Given all the people whose views must be considered, preparing, editing, and revising the strategic plan is a labor-intensive and time-consuming process. I especially want to thank Phoebe Brown, my Special Counsel, Samantha Ross, Special Counsel to Board Member Niemeier, Bill Wiggins, Deputy Chief Administrative Officer, and Lily Lin, Senior Budget Analyst, for their efforts in updating the strategic plan this year.