Board Approves its 2010 Budget and Related Strategic Plan
The Public Company Accounting Oversight Board today approved its budget for the 2010 fiscal year and related strategic plan. The budget contemplates approximately $183.3 million in outlays for 2010, compared to $157.6 million for 2009. The 2010 budget is subject to approval by the Securities and Exchange Commission.
"Consistent with our responsibilities under the Sarbanes-Oxley Act, the Board devotes the lion’s share of its resources to conducting inspections of the registered public accounting firms – both domestic and foreign – that audit U.S. publicly-traded companies," said Daniel L. Goelzer, Acting PCAOB Chairman. "Key drivers of the 2010 budget include changes in audit risk as a result of the economic crisis, resource demands related to international inspections, and an increasing number of litigated enforcement proceedings," he added.
The majority of the PCAOB’s expenses in the 2010 budget relate to increased headcount, information technology and facilities. The budget provides for increases over the 2009 budget of 83 staff in the Division of Registration and Inspections, 11 staff in the Division of Enforcement and Investigations, and 4 in the Office of Research and Analysis.
The budget estimates an end-of-year headcount of 636 employees. This estimate is based on certain assumptions, such as vacancies and turn-over. Actual ending headcount may differ. Registration and inspection staff account for 57 percent of the total.
As of November 30, 2009, there were 2,298 public accounting firms registered with the PCAOB, including 932 firms that are based outside the United States. Firms with more than 100 public company audit clients must be inspected annually; firms with fewer public company audit clients and that regularly issue audit reports must be inspected at least once every three years.
Pursuant to the Sarbanes-Oxley Act, the PCAOB budget provides the foundation for the 2010 assessment of accounting support fees paid by public companies and other issuers. The 2010 budget projects a total assessment of $178.1 million.
The strategic plan will serve as the framework for the Board’s programs and operations during the coming year. "The strategic plan provides a link between the Board’s view of the auditing and financial reporting environment and the activities funded by the budget," Goelzer said.
The PCAOB's strategic plan is currently available to the public and can be found under the "About Us" tab on the PCAOB Web site at www.pcaobus.org. A summary sheet of the 2010 budget, as approved by the SEC, will also be available, after the SEC acts on the Board’s 2010 budget.