The Securities and Exchange Commission voted today to approve the 2019 budget of the Public Company Accounting Oversight Board (PCAOB) and the related annual accounting support fee.
The 2019 PCAOB budget totals $273.7 million. The accounting support fee totals $262.9 million, of which $228.5 million will be assessed on public companies and $34.4 million will be assessed on broker-dealers. The accounting support fee approximates the PCAOB’s annual budget, with any differences attributable to certain timing differences, adjustments to the working capital reserve, and the potential underspending from the prior year budget being carried forward into the accounting support fee calculation.
“The PCAOB plays a key role in our capital markets through the oversight of the auditors of public companies and broker-dealers registered with the SEC,” said SEC Chairman Jay Clayton. “We should all recognize that these important PCAOB responsibilities are a means to a fundamental end – reliable, consistent, and meaningful financial reporting and high audit quality. I am appreciative of the PCAOB’s continued commitment to use their resources effectively, for enhancing the quality of audit services and evaluating whether any changes are needed to its program and operations.”
The PCAOB’s 2019 budget represents an increase of approximately five percent from its 2018 budget of $259.9 million. The 2019 accounting support fee of $262.9 million is approximately 12 percent higher than the 2018 accounting support fee of $235.3 million.
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Public Company Accounting Oversight Board 2019 Budget and Accounting Support Fee
Dec. 19, 2018
On Nov. 15, 2018, the PCAOB adopted its 2019 budget and its strategic plan for 2018-2022, including:
- A total budget of $273.7 million.
- An accounting support fee of $262.9 million, allocated as follows:
- $228.5 million to be assessed on issuers; and
- $34.4 million to be assessed on registered broker-dealers.
The PCAOB’s 2019 budget represents an increase of approximately five percent from its 2018 budget of $259.9 million.
The 2019 budget will be funded primarily by the 2019 accounting support fee of $262.9 million, which is approximately 12 percent higher than the 2018 Commission-approved accounting support fee of $235.3 million. The increase in the accounting support fee relative to the increase in the budget primarily reflects the fact that there will be an increase to the working capital reserve for the first five months of 2020. The working capital reserve is established to cover the PCAOB’s estimated expenditures in the first five months of its fiscal year due to the timing to complete the billings and collections of the accounting support fee.
The PCAOB oversees the audits and auditors of the financial statements that are filed by issuers and registered broker-dealers. The Sarbanes-Oxley Act of 2002, which established the PCAOB, provides the Commission with oversight responsibility over the PCAOB. This includes reviewing and approving the PCAOB’s budget and accounting support fee annually.
Under Section 109 of the Sarbanes-Oxley Act, the PCAOB is required to establish, with the approval of the Commission, a reasonable accounting support fee to fund its operations. The fee is assessed annually on issuers and registered broker-dealers. Consideration of the budget for approval is one of the many ways in which the Commission exercises its oversight responsibilities of the PCAOB.
The PCAOB will proceed with issuing invoices to issuers and registered broker-dealers using the allocation above in accordance with the PCAOB’s funding rules.
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