Statement on Proposed 2012 Budget and Strategic Plan

I support the 2012 PCAOB budget in the form presented to the board. This budget is the result of a lengthy and arduous budgeting and strategic planning process ably led by the Board’s Office of Budget, Program Analysis and Strategic Planning. It has also involved extensive dialog with and comments from the Securities and Exchange Commission’s Office of the Chief Accountant. The total 2012 budget of $227.7 million represents an increase of approximately $23.3 million or 11.4 percent over the Board’s 2011 budget of $204.3 million.

Of the $23.3 million increase, $21.4 million or approximately 92 percent of the increase represents increases in the budget of the Board’s Inspections Program. These increases are explained by three factors: (1) the need to engage and train new inspectors to carry out the Board’s new statutorily mandated duty to inspect firms that audit SEC registered broker-dealers; (2) the need to increase inspection staff (along with related travel expenses) to conduct inspections of non-U.S. audit firms as the Board enters into cooperative arrangements with an increasing number of non-U.S. jurisdictions; and (3) the achievement finally of the Inspection Division’s hiring goals for inspectors to staff fully its U.S. inspections programs.

Taken as a whole the balance of the Board’s 2012 budget increases from approximately $112.7 million to $114.5 million, an increase of approximately $1.8 million or 1.6 percent. Given that the budget of the Board’s Division of Enforcement and Investigations is being increased from approximately $17.45 million to approximately $20.03 million or by approximately $2.6 million, reflecting a growing docket of investigations and enforcement proceedings, the balance of the Board’s budget has actually decreased for 2012.

This budget will enable the Board to undertake its new duties to inspect the auditors of registered brokers and dealers, will enable us to conduct a robust international inspection program, will strengthen the resources of our Enforcement and Inspections Division and will prudently manage the Board’s other programs and obligations. Given the Board’s expanded duties, I believe this budget reflects a prudent approach to the Board’s duties and I support its adoption.

I also support the adoption of the Board’s five year strategic plan. For the first time, this plan includes a “SWOT” analysis, detailing the Board’s views of the organization’s strengths, weaknesses, and the opportunities available to and threats facing us. It also focuses on three overarching goals rather than the extensive list of goals in earlier strategic plans. This in my view will enable the board more effectively to manage and monitor our progress against these goals in the coming years.

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