SEC Approves Budget for Public Company Accounting Oversight Board

By a divided vote, the SEC approved the 2017 budget of the Public Company Accounting Oversight Board ("PCAOB") and the related annual accounting support fee. The 2017 budget of $268.5 million is approximately four percent higher than the PCAOB's 2016 budget, and the accounting support fee of $268 million is approximately six percent higher than that of the previous year.

At the SEC meeting, Chair Mary Jo White stated that the PCAOB must continue to focus on identifying and addressing new and emerging risks to audit quality. She emphasized the importance of maintaining rigorous standards for audits of public companies and broker-dealers. Chair White reported that the PCAOB will undertake a study of operational efficiency and budgetary needs, and that she expects the PCAOB to submit its report to the SEC by March 2017.

SEC Commissioner Kara Stein praised the PCAOB's work:

"The need for additional oversight was made clear after a series of sensational accounting scandals that exposed weaknesses in our accounting and financial reporting systems. The collapse of several large companies following revelations of fictitious accounting shook public confidence in financial reports, and the auditors that served as gatekeepers. This loss of confidence threatened to undermine America's role as home to the best capital markets in the world."

SEC Commissioner Michael Piwowar voiced concerns about rising costs and voted against the budget. Commissioner Piwowar questioned these increasing costs despite "years of promises to finalize a comprehensive compensation framework, as well as an evaluation of staffing levels across all offices, divisions, and programs."

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