Statement in Support of the Board’s 2026 Budget

Remarks as prepared for delivery 

Good morning. We are here today to discuss and vote upon the PCAOB’s 2026 budget.

Abraham Lincoln is credited with saying, “Give me six hours to chop down a tree, and I will spend the first four sharpening the axe.” That attention to planning and detail is crucial to the PCAOB’s annual budget process, which involves significant thought and careful deliberation by the Board members, the PCAOB’s outstanding budget team, program leaders, and many others across the organization.

The process to get the PCAOB’s 2026 budget to this point was no different. This began in the spring and reflected the conscientious approach that the Board members and staff take when pursuing all our oversight activities.

With that said, I want to express my deep appreciation for the tremendous efforts of our Acting Chief Operating Officer Randy Thornton, Acting Chief Financial Officer Mia Holland, Budget Officer Jim Hearn, and budget team members: Yoss Missaghian, Alfredo Azocar, and Marcia Saavedra. But for your efforts, we would not be here discussing the PCAOB’s 2026 budget today.

I also want to acknowledge the staff of the U.S. Securities and Exchange Commission (SEC) and thank them for their support, counsel, and engagement throughout this process, in particular, Chief Accountant Kurt Hohl and Senior Associate Chief Accountant Anita Doutt.

The PCAOB’s work is an indispensable component of the broader financial reporting ecosystem. When compared to the overall size of the U.S. capital markets, the PCAOB is a cost-effective means of protecting investors and instilling trust and confidence in the capital markets.

The PCAOB’s efforts improve audit quality and provide a downstream effect of supporting the efficient allocation of capital and facilitating the growth of our capital markets that ultimately undergird our economy. Quality audits ensure confidence in financial reporting that benefits the public interest.

The PCAOB’s successes and positive contributions to our capital markets over the past two decades would not be possible without the dedication, determination, strength, and resilience of our staff. The staff make it possible for the PCAOB to fulfill its mission to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports. This is primarily accomplished through inspections, standard setting, and disciplinary action.

As the PCAOB has evolved over the years, we are fortunate to have been able to attract and retain talented individuals that are experts in accounting and auditing with unique professional experience. It is because of them that the PCAOB has grown and matured into the organization that it is.

I am profoundly grateful to work alongside them. 

As I just mentioned my belief that the PCAOB is a cost-effective means of protecting investors, I also believe it is vitally important that the PCAOB be a good steward of its resources and not overlook the fact that its operations are funded primarily from an annual support fee paid by public companies and registered broker-dealers.

With that guiding principle in mind, we are voting today on a 2026 budget of $362.1 million, which represents a reduction of 9.4% from the 2025 budget and a 3.7% decline from our estimated 2025 spending.

The PCAOB’s anticipated headcount at the end of 2026 will be 817, which is 47 positions fewer than the 864 at December 2025. One additional item I want to highlight is that this budget will reduce annual Board member salaries by 52% for the Chair and 42% for the other Board members.

As a result of these reductions, the accounting support fee to be paid by public companies and registered broker-dealers in 2026 will be 18.4% less than in 2025. The PCAOB, like any regulatory organization with a statutory mission, should periodically perform reviews of our internal processes to ensure we are executing our mandate effectively and efficiently.

To this end, the 2026 budget funds reviews to be performed by independent consultants of the PCAOB’s compensation strategy and organizational structure.

Although the 2026 budget is nearly 10% lower than the 2025 budget, it is worth nothing that as we end the year, our 2025 spending is itself running about 6% under the 2025 budget.

So, our 2026 budget is not the sharp drop-off it might at first appear to be, but rather, it is a continuation of a belt-tightening that is already underway. And I am satisfied that even with that continuation in 2026, the PCAOB will be equipped to execute its statutory mission with the necessary level of quality and rigor.

I would like to emphasize the following areas that the 2026 budget will support.

First, inspections. Our global inspection program differentiates the PCAOB from most other regulators. A rigorous inspection program of registered firms located in both the U.S. and abroad with transparent reporting has been the hallmark since the very first days of the PCAOB.

The 2026 budget will allow our talented inspectors, who work, day in and day out, around the globe, to continue to meet our mandatory annual and triennial inspection requirements for public company auditors and continue inspections of broker-dealer auditors at levels consistent with the recent years. In particular, I am pleased that the 2026 budget will support our inspections of registered accounting firms located in China and Hong Kong at current levels. 

Second, the 2026 budget will allow for the continuation of the PCAOB’s standard-setting activities – advancing the high-quality auditing and related professional practice standards that protect investors and support the public interest. The budget will allow our standard-setting activities to continue considering emerging audit issues, technology, and risks and ensuring our activities are informed by oversight and research.

The 2026 budget will also support the PCAOB’s enforcement division, which is comprised of talented individuals who bring a combination of legal, accounting, and auditing expertise to bear on the Board’s responsibility to investigate possible violations and to impose disciplinary sanctions when registered firms and associated persons are found to have violated the laws, rules, or standards under the Board's jurisdiction.

Like our inspection activity, our enforcement activity crosses the globe, and I am pleased that this budget will continue to support the important role it plays in the PCAOB’s mission. 

Additionally, I believe this budget supports the PCAOB’s efforts to increase transparency, which informs the Board’s work. This includes hosting Small Business and Broker-Dealer Forums across the country, the Conference on Auditing and Capital Markets, in-person meetings of both the PCAOB’s Standards and Emerging Issues Advisory Group (SEIAG) and Investor Advisory Group (IAG), and the many informative publications issued by our staff across divisions and offices on a regular basis.¹

Vibrant and efficient capital markets cannot function efficiently without transparency and consistently accurate financial reporting backed up by high quality audits. The PCAOB’s oversight promotes high quality auditing which facilitates investor confidence in the markets, and this budget will allow these oversight activities to continue in 2026.

Finally, I believe that the 2026 budget will allow the PCAOB to continue in the direction of being what I have called a "marketplace of ideas." With the emerging transformations in the auditing profession due to such developments as artificial intelligence and private equity influenced alternative practice structures, the PCAOB needs to be at the forefront of constructive engagement, among all stakeholders, geared toward steering a course that harvests the opportunities that those developments present, but without sacrificing core investor protections.

In closing, I support the recommended 2026 budget. It provides funding to satisfy the Board’s mandate and will allow the PCAOB to perform the critical work of protecting the interests of investors.

Thank you.