Statement on the PCAOB 2020-2024 Strategic Plan and 2021 Budget

Thank you, Mr. Chairman. I fully support the PCAOB's 2020 to 2024 Strategic Plan and the 2021 Budget. In the past year, the Board has remained committed to our mission. Despite the hurdles we have faced with COVID-19, we have continued to make substantial progress toward our goals. This Plan and the supporting Budget are aligned with these goals and will help us as we move forward.

In 2020, we were able to pivot and adapt quickly to the challenges that COVID-19 presented for our organization. I am very proud of the seamless transition we made to 100% of our workforce working remotely. This is in large part due to the technology investments we made in our information technology infrastructure and our newly created Office of Enterprise Risk Management. We also reviewed our policies and procedures to enable our workforce to successfully work remotely.

We have been flexible and nimble with our inspections program this year amid the pandemic and moved to remote inspections, both domestic and internationally, starting in March 2020. We also updated our inspections approach to address auditing concerns related to the pandemic. We inspected reviews of interim financial information and we accelerated and altered our original inspections plan, to look at a sample of fiscal year end audits of issuers through June 30, 2020 and quality control areas that may have been impacted by the pandemic. These changes were made to provide real-time insights into how the COVID-19 crisis is impacting audits and audit quality.

This year, we simultaneously issued the 2018 inspection reports for the six largest U.S. audit firms in a new, redesigned format. This format is more user-friendly and reduces the amount of technical and boilerplate language. The 2019 reports for all firms, in the redesigned format, will begin to be issued shortly.

This year we modernized our approach to managing our research and standard-setting agendas to include those projects that we anticipate will have a public milestone in the next 12 to 18 months. We released a quality control concept release in December 2019. We took a fresh look at the standard and are working to draft a quality control standard that will be scalable so all firms can tailor it appropriately and which will consider the current auditing environment.

This 2021 budget is aligned to support these efforts as the Board moves forward. The 2021 budget considers the right effects of COVID-19 and has been adjusted for anticipated changes, even though conditions going forward are uncertain. In addition, the increase in our budget for personnel in the Office of the Chief Auditor is important and will support the implementation of planned new standards.

Lastly, I want to thank our PCAOB staff. Your dedication to our mission is crucial to our success and even with all of the challenges in 2020, you have preserved and upheld the values of the PCAOB. I also want to thank the Office of Administration for their efforts in bringing this budget forward. In addition, thank you to our colleagues at the Securities & Exchange Commission for their feedback and oversight.