On December 15th, the SEC voted to approve the 2022 budget of the Public Company Accounting Oversight Board (PCAOB) and the associated annual accounting support fee. The PCAOB monitors the audits and auditors of the financial statements that are submitted by registered broker-dealers and issuers. Section 109 of the Sarbanes-Oxley Act of 2002 requires the PCAOB to establish, with SEC approval, a reasonable accounting support fee to fund its operations.
The 2021 PCAOB budget totals $310.3 million, an increase of 8% from the previous year’s budget. This reflects changes resulting from greater personnel costs due to increased headcount and travel costs. The accounting support fee (ASF) totals $297.9 million, of which:
- $30.7 million will be assessed on registered broker-dealers
- $267.2 million will be assessed on issuers (or public companies)
The accounting support fee estimates the PCAOB’s annual budget with variances typically related to: 1) PCAOB expenditures and certain timing differences in fee collections; 2) modifications to the working capital reserve; and 3) the potential unused funds from the previous year’s budget being carried forward into the accounting support fee calculation.
The Sarbanes-Oxley Act of 2002, which established the PCAOB, gives the SEC oversight responsibility over the PCAOB. That charge includes evaluating and approving the PCAOB’s budget and accounting support fee each year. The SEC and the PCAOB also collaborate on a number of issues, including standard setting, inspections, and enforcement, primarily via regular staff meetings in addition to direct communication between the SEC and the PCAOB’s Board.
The PCAOB will continue distributing invoices to registered issuers and broker-dealers using the aforementioned allocation pursuant to the PCAOB’s funding rules.
Sources:
SEC Approves 2022 PCAOB Budget and Accounting Support Fee (www.sec.gov)
SEC Order Approving PCAOB Budget and Accounting Support Fee for 2022 (www.sec.gov)
Fact Sheet (www.sec.gov)
