Budget Shrinks for U.S. Audit Overseer; Support Fees Drop

The Financial Accounting Resource Center™ is a comprehensive research service that provides the full text of standards, the latest news from the Accounting Policy & Practice Report ®,...

By Amanda Iacone

The federal regulator charged with overseeing audits of public companies will carry out its mission with slightly less money in 2018.

The Securities and Exchange Commission approved the nearly $260 million budget for the Public Company Accounting Oversight Board in January.

The PCAOB’s 2018 budget reflects a 3 percent reduction in spending. And revenue from the fees that companies pay to support the board’s operations will drop 12 percent thanks in part to cost savings that reduced the board’s spending last year, according to the PCAOB.

The budget approval came amid several turbulent months for the board.

In December, the SEC, which oversees PCAOB activities, announced it had replaced all five board members. And late last month, federal prosecutors outlined charges against three former PCAOB employees who were accused of making unauthorized disclosures of PCAOB plans for inspections of KPMG audits.

As a result of the criminal probe, PCAOB planned to review its ethics policies and information security protocols. And the new budget provides an extra $3 million that will be used to hire information security staff.

The budget trims spending for travel, training, administrative costs, and recruiting, according to PCAOB documents.

Despite the smaller budget, former Chairman James Doty said in November that the budget would ensure the board could continue its inspections and issue any resulting disciplinary sanctions.

To contact the reporter on this story: Amanda Iacone in Washington at aiacone@bloombergtax.com

To contact the editor responsible for this story: S. Ali Sartipzadeh at asartipzadeh@bloombergtax.com

Copyright © 2018 Tax Management Inc. All Rights Reserved.

Request Financial Accounting