PCAOB Chair Williams Statement on the 2025 Budget

Remarks as prepared for delivery

I am pleased to support the 2025 Budget that provides the PCAOB with the funding necessary to execute our investor protection mission, while maintaining essentially the same number of staff as assumed in the 2024 Budget.

Our work continues to be guided by the goals and objectives set forth in the 2022–2026 Strategic Plan. Since the plan was approved by the Board two years ago, we have made significant advancements in protecting investors through our oversight activities. The 2025 Budget will enable the organization to build upon this success through the dedicated efforts of the PCAOB’s talented staff.

The majority of our staff serve in our Division of Registration and Inspections (DRI). The 2025 Budget will enable our DRI staff to continue to build on our 2024 progress. Specifically, the 2025 Budget will enable our 430 staff in the Firm Inspections Group to continue their outstanding work in conducting domestic and international inspections.

By the end of 2024, our staff expect to have inspected 232 audit firms and 930 audits across domestic annual, domestic triannual, international, and broker-dealer audits. These numbers include 79 international inspections of firms and 226 audits, including audits of firms in Mainland China and Hong Kong. 

DRI’s staff continue to work diligently to issue timely inspection reports, and the 2025 Budget will allow us to continue to meet our strategic objective in that regard. 

This year, we successfully improved the timing of issuing our inspection reports of both annually inspected and triennially inspected firms – providing the reports to the public months earlier than in recent years. We also published new charts on our website that illustrate data from the annually inspected firm reports that increase the transparency of our inspection data and make it easier for investors and others to understand and compare inspection results both across firms and over time. Further, this year, we increased our outreach activities that deliver useful guidance to the audit profession, including audit committees, auditors, and other stakeholders, through our staff Spotlight reports, which highlight emerging risks, trends, and observations from our inspection activities to further our stakeholder’s understanding and support their efforts to proactively improve audit quality.

Of course, the 2025 Budget also enables our staff to continue to focus on remediation and providing guidance to firms as they prepare to comply with new standards, including QC 1000.       

The 2025 Budget includes the resources necessary to continue to drive our inspection activities in support of our investor protection mission.    

Our staff in our Office of Chief Auditor (OCA), Office of Economic and Risk Analysis (OERA), and the Office of the General Counsel (OGC) have worked diligently to update our standards and rules. With today’s adoptions of the Firm and Engagement Metrics and Firm Reporting projects, the Board has taken more formal actions on standard setting and rulemaking this year than any year since 2003 when the PCAOB was established.

This budget provides the funding to direct our focus to other standards that have not been updated since they were adopted by the Board in 2003 and are in need of modernization. This budget will also provide resources for us to develop materials to assist firms with updating their methodologies and training their staff on the upcoming changes.

The staff of our Division of Enforcement and Investigations (DEI) continue to focus on cases with significant audit violations, failures to comply with auditor independence rules, and matters threatening the Board’s oversight activities, such as noncooperation with PCAOB inspections and investigations. So far in 2024, we have issued over $35 million in fines – all of which is directed toward funding scholarships for accounting students. But we also go beyond issuing penalties and use other important forms of relief. For example, where appropriate, we revoked firm registrations and barred bad actors from conducting PCAOB audits, we required functional changes to a firm’s supervisory structure, and we required firms to retain an independent monitor to drive improvements and best protect investors. This budget provides us with the resources to continue to hold bad actors accountable. 

We must continue to be good stewards of the fees collected to fund the PCAOB. This means making sure our organization operates as effectively as possible and strives to challenge the status quo as we execute our mission.

To improve organizational effectiveness, this year, we elevated our approach to stakeholder engagement. For example, we enhanced our outreach and support for smaller audit firms by organizing a nationwide series of in-person and virtual forums for auditors of smaller businesses and broker-dealers, with each event hosted by a different Board Member. The forums provide the PCAOB an opportunity to share valuable resources and information with small firms to help them improve audit quality, while also giving us a chance to hear from them directly about their unique needs and challenges. In addition, our Office of the Investor Advocate (OIAD) issued seven Investor Advisories and Bulletins so far this year. These publications provide timely guidance and accessible background material to broaden and deepen investors’ understanding of PCAOB standard-setting and rulemaking activities and, more generally, the audit profession.

We also continue to focus on improving our well-functioning internal processes and information technology capabilities, while investing in our highly skilled staff. Without this focus, none of the accomplishments I just described, along with countless others, could have been achieved.

Our people are imperative to successfully executing our mission. This is why it is appropriate that approximately three quarters of this budget relates to compensation, which is also consistent with past budgets. This budget enables us to both provide our staff with competitive compensation that acknowledges their tremendous efforts on behalf of investors and retain them, as well as attract new, expert talent to help us meet our investor-protection mission.

In closing, I would like to thank everyone who played a role in finalizing the 2025 Budget. I would like to specifically thank my fellow Board Members and PCAOB staff for their collaboration. I would also like to recognize our Chief Operating Officer, Jamey McNamara, our Chief Financial Officer, Holly Greaves, our Budget Officer, Jim Hearn, and the rest of their team — Yoss Missaghian, Alfredo Azocar, Marcia Saavedra, and Lorene Rosenberg — along with the leadership of each of the divisions and offices for their efforts on the budget.

Lastly, I would like to thank Chair Gensler, the Commissioners, and staff at the Securities and Exchange Commission (SEC) for their support and guidance.