Careers
SubscribeStatement in Support of the 2026 Budget
Remarks as prepared for delivery
Thank you, Acting Chair Botic.
My remarks today reflect my deep appreciation of the PCAOB’s mission, my extensive professional experience in budgeting, and the knowledge I have gained from almost four years of observing our staff in the field and listening to external stakeholders. Today’s budget of $362.1 million is a 9.4% reduction relative to the SEC approved 2025 Budget and a 3.7% reduction relative to the current estimate of the PCAOB’s spending for 2025.
These reductions reflect efforts by this Board and the SEC to reimagine and reconsider how the PCAOB does business. Our goal is to achieve efficiencies without adversely impacting our ability to effectively pursue our investor protection mission.
In my remarks today, I will discuss 1) pursuing our mission in a period of change, 2) what I see as driving budget decisions, and 3) the strength, resilience, and importance of the PCAOB staff.
Let me begin with the importance of pursuing our mission during a period of change. The PCAOB was established by Congress, with overwhelming bipartisan support, in response to massive frauds, including at Enron and Worldcom. Investors were harmed, markets were rattled, and reputations were damaged. Hard lessons were learned and the role of auditors was scrutinized. Early in the life of the PCAOB, William J. McDonough, the PCAOB’s first Chairman, keenly noted that, “[w]hat's at stake for all of us is the trust of the American people in our markets and the companies that drive our economy. We have an opportunity to reclaim that trust.”1 The lessons learned during that period still ring true today and must be heeded to avoid history from repeating itself.
For more than two decades now, the PCAOB has steadfastly pursued restoration of investor trust in our capital markets. Earlier this year, as the legislative process contemplated the path forward for the PCAOB, the PCAOB’s critical role in the broader capital markets was captured in the passionate support from domestic and international stakeholders. Through my direct engagement as Vice Chair on the Investors and Other Stakeholders Working Group for the International Forum of Independent Audit Regulators, I have heard from others about the PCAOB’s positive impact on audit quality globally. I am grateful for those who recognize and support the PCAOB’s mission and continuing existence.
The budget before us today comes during a season of significant change – change for the PCAOB, the audit profession, and the U.S. capital markets more broadly. Corporate structures are increasing in complexity; IPO activity has accelerated; we have seen audit firm consolidations; and private equity is infusing capital into the profession. Audit firms are experimenting with and deploying new and powerful technological tools to enhance auditing procedures. Some State Boards are providing alternative pathway requirements to becoming a CPA. And accounting students are recognizing that they must acquire requisite skills to be prepared to embrace technological advancements in auditing.
While we must remain vigilant to changes that could challenge our mission, we also have opportunities to evolve along with the profession and inspire the next generation of auditors. This budget represents another defining point in our maturation – opportunities to evolve our efficiencies and how we deliver on our mission. In response to anticipated changes in audit execution, such as through the use of technology, our standards, inspections, and enforcement programs will need to continue evolving. How we receive, analyze, protect, and aggregate data must take into consideration that technologies deployed in the audit are changing daily. As preparers, firms, investors, regulators, and others across the ecosystem, experiment with and embrace new technologies, more will be expected of us as regulators of the public audit profession. This will require us to understand the impact of artificial intelligence and other technologies and consider whether additional guidance might be helpful to auditors and other stakeholders.
To continue our evolution requires re-evaluation of aspects of our regulatory approach, including our training programs, hiring priorities, scope of our interactions with those we regulate, which technologies we invest in, and more. The choices we make in the 2026 budget determine our short- and long-term effectiveness in driving audit quality forward.
What choices are driving the 2026 budget? I am no stranger to the budgeting process. Through my years of leading U.S. Air Force Budgeting, and in various executive roles in government agencies, I have learned that budgets should reflect deep thinking as priorities shift. Allocation of resources should consider how best to execute the mission.
If today’s budget is adopted, it will align our resource dollars slightly below (2.3%) our 2024 actual spend. What continues to be our biggest budget driver is the compensation of our expert staff – our greatest asset. It is incumbent upon us to continue assessing how we deploy our staff as part of a continuous process improvement mindset.
Similar to other organizations, how the PCAOB operates today was developed over time. The current structure of the PCAOB has been built brick by brick over decades by various Boards. Today’s PCAOB is not just a reflection of today’s Board but reflects collective efforts over time. Lessons learned in our past have informed how we operate today and will influence how we structure the PCAOB for tomorrow.
The PCAOB is a model for other audit regulators around the world. It is important that we judiciously evaluate the allocation of our resources to avoid pitfalls that affect efficiency and effectiveness. Good budgeting is key to effective organizational strategy for future years. In that regard, the PCAOB has expanded its outyear budgeting capabilities, in my time here, with the addition of a Chief Strategy Officer.
As 2026 progresses, I encourage leaders across the PCAOB to continue identifying ways to streamline processes to reduce costs. In coordination with the SEC, we expect to evolve our approach across our regulatory programs. This includes increased in-person inspection activity, advancing our technological capabilities, and considering new ways to gather input and expertise to more effectively progress our standards-setting projects.
Finally, I would like to take some time to focus on the engine of the PCAOB, our people. Over the course of my tenure, I have witnessed their dedication, professionalism, and resilience. Through periods of change and uncertainty, the staff has persisted in bringing their expertise and insights to bear day after day – seeking to advance audit quality in service to investors in our capital markets.
The staff’s dedication is evident in the rigor and thoughtfulness that they apply to their responsibilities and to their recommendations to the Board. Over the past several years, the PCAOB has made notable advancements that reflect the staff’s tireless efforts and commitment. For example, the Board modernized and finalized certain interim standards, including standards relating to quality control, an auditor’s use of confirmation, the auditor’s general responsibilities, and amendments related to aspects of designing and performing audit procedures that involve technology-assisted analysis of electronic information. Standard-setting is not an easy task. It requires comprehensive internal deliberations, extensive engagement with external stakeholders, and continuous assessment of how we can effectively promote investor interests. We made significant strides in our standard-setting program over the past years because of the immense contributions of staff from across our organization.
Additional examples of the enormous dedication and drive of our staff are reflected in both the extent of staff publications available to our stakeholders, and the Board’s acceleration of the issuance of inspection reports. With respect to the publication of inspection reports, this year, the Board issued inspection reports for the six global network firms in March, which was significantly earlier than the prior year. Indeed, our progress in 2025 was built on the progress the Board made in 2024. Such acceleration of the issuance of inspection reports, year over year, requires buy-in and purposeful collaboration among staff experts. These achievements are not minor. The statutory mandate for the PCAOB to “conduct a continuing program of inspections”2 is a key regulatory responsibility under the Sarbanes-Oxley Act. In the July 3, 2002 Senate Report of the Committee on Banking, Housing and Urban Affairs, the Committee noted that a “program of inspections is essential to identify problems in firm procedures, training, and ‘culture’ before those problems can produce audit failures that trigger large investor losses and threaten confidence in the capital markets.”3 As such, our inspections processes are necessarily significant and encompass individual audit engagements and a firm’s quality control system. Given that, the development of inspection reports requires deliberation and thoughtfulness from a significant number of staff experts. As such, it is truly notable that our staff has continued to raise the bar for executing its inspections work and drafting reports more efficiently. By publishing results sooner, investors and other stakeholders have more current inspection findings to consider in making critical decisions.
Finally, I would like to highlight the work of our enforcement staff. The Sarbanes-Oxley Act authorizes the Board to investigate potential violations of PCAOB rules and standards. I believe that our investigators have demonstrated rigor and carefulness in recommending disciplinary action against registered firms and associated persons. For the good of investors and the audit profession, accountability is important, and deterrence is imperative. Based on my experience and engagements with auditors, I believe that auditors, by and large, earnestly seek to comply with applicable PCAOB rules and standards. There are instances, however, when a firm or an associated person may miss the mark. As such, I believe that our investigators serve a critical function in assessing evidence and determining which cases the Board should pursue and which investigations should be closed. In my view, our investigators present thoughtful and balanced recommendations that have enabled me to make judgements about how the Board can advance investor interests through enforcement action.
Our people, those out front and those in the background, make it possible for the PCAOB to effectively pursue its statutory mission. The work of our staff is having impact, as reflected by marked improvements in the Part I.A deficiency rates for larger firms and smaller firms. Without a doubt, investors are better protected when audit quality increases.
The PCAOB has made significant strides to improve audit quality, and we should not let our foot off the gas. Now, are there different routes we can take going forward to be more efficient and effective? Absolutely. The 2026 Budget reflects some of those choices. On the path forward, it is important that the PCAOB remain resolute in pursuing the mission for which it was created: investor protection.
In closing, I would also like to applaud the contributions of the PCAOB staff in our Office of the Chief Operating Officer, including Randy Thornton, our Acting COO, Mia Holland, our Acting CFO, Jim Hearn, our Budget Officer, and the outstanding budget team, including Yoss Missaghian, Alfredo Azocar, Marcia Saavedra. I would also like to thank Lorene Rosenberg, Chief Strategy Officer. Additionally, thank you to those across the PCAOB’s divisions and offices who have played an integral role in developing our 2026 budget. Lastly, I would also like to acknowledge the SEC and its staff, the PCAOB Acting Chair’s office, and my staff for their assistance and support.