At an open meeting, the Public Company Accounting Oversight Board (PCAOB) approved its fiscal year 2024 budget, guided by the strategic plan and the Board’s investor protection mission.
Commenting on this, PCAOB chair, Erica Williams, said: “Our strategic plan has been instrumental as the PCAOB has renewed and strengthened its focus on protecting investors.
“With the approval of our 2024 budget, the PCAOB is poised to continue delivering results for investors and the U.S. capital markets.”
The 2024 budget reflects the resources expected to be required in 2024 for the PCAOB to carry out its statutorily mandated responsibilities under the Sarbanes-Oxley Act and achieve the goals and objectives as set forth in its 2022-2026 Strategic Plan approved by the Board last year.
The strategic plan is built around four key goals to help the PCAOB fulfill its investor-protection mission:
- Modernising Standards,
- Enhancing Inspections,
- Strengthening Enforcement, and
- Improving Organisational Effectiveness.
2023 Accomplishments
In 2023, the PCAOB built significantly on the progress it has made to advance its 2022-2026 strategic goals. Highlights in 2023 include the following:
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By GlobalData- Modernising Standards:
- In 2023, the Board has taken more formal actions on standard setting and rulemaking than any year in the last 10 years, issuing four proposals – with one more expected to be considered before year’s end – and adopting a final confirmation standard and related amendments that had previously been stalled since 2010.
- By the end of 2023, it is anticipated the Board will have considered five proposals – more than any single year in PCAOB history since the first set of standards and rules were proposed in 2003.
- Over the past two years, the Board has issued six proposals – with one more expected later this year – and adopted two standards and related amendments.
- Enhancing Inspections:
- As the PCAOB continued to challenge audit firms to sharpen their focus on protecting investors and improving audit quality, the PCAOB in 2023 enhanced its inspection reports with more transparency, including a new section on auditor independence and a range of other improvements to make the reports more transparent, relevant, and useful.
- The PCAOB also launched a set of new features on its website to help investors, audit committee members, and others compare inspection report data among firms.
- Strengthening Enforcement:
- As of November 14, 2023, total fines imposed by the PCAOB have reached $11.9m (£9.5m) for the year, surpassing last year’s record-breaking total of $11.0m, with several weeks left to go. The 2023 penalties are already more than double the total penalties in each of the five years before the record-breaking year in 2022.
- In 2023, the PCAOB has also notched several enforcement firsts, including requiring the first-ever changes to a firm’s supervisory structure, imposing the PCAOB’s largest-ever fine on an audit firm that is not a member of a global network, and imposing the PCAOB’s first-ever sanctions related to a firm’s membership in an accounting alliance.
- Improving Organisational Effectiveness:
- In 2023, the PCAOB expanded its stakeholder outreach capabilities, notably with the creation of the Office of the Investor Advocate.
- Internally, the PCAOB’s efforts to improve organisational effectiveness have resonated with staff. In an internal spring 2023 survey, 84% of staff said they would recommend the PCAOB “as a great place to work,” up from 55% a year earlier.
With core investments in people, processes, and technology, the budget is $384.7m (£309.4m) and provides funding for 946 positions. The PCAOB budget is subject to approval by the U.S. Securities and Exchange Commission.
The budget documents, along with such documents from previous years, including the 2022-2026 Strategic Plan are available on the PCAOB website.