SEC Approves PCAOB 2025 Budget

In a 3-2 vote, the SEC approved the PCAOB's 2025 budget request for $385 million.  

At a prior PCAOB Board Meeting, Chair Erica Y. Williams advocated for the proposed budget, highlighting achievements in 2024, including inspections of 930 audits and over $35 million in fines from enforcement actions. She also highlighted the budget priority to invest in additional staff, noting that three-quarters of the budget was allocated to compensation. 

Chair Gary Gensler supported the budget request, noting that the $35 million increase for 2025 "supports 20 new positions," half of which "are for the Division of Registrations and Inspections," which restores the inspections division to its 2017 staffing levels.

In dissent, Commissioner Hester M. Peirce questioned whether increases in spending have improved audit quality. She said "[t]he PCAOB paints a picture that does not look a lot better than pre-PCAOB days," citing persistent audit deficiencies, rising restatement rates and increasing fines. Further, Ms. Peirce criticized the Board's heavy-handed approach, warning it risks turning audits into "a mechanical exercise where risk-averse, robotic auditors engage in a box-checking exercise." She advocated for a moderated course that emphasizes principles-based standards, proactive assistance to firms and enforcement reserved for serious violations. 

In dissent, Commissioner Mark T. Uyeda questioned whether the PCAOB's budget, at 18.6% of the SEC's appropriations, is justified given the size of its mission compared to the SEC's broader responsibilities. He noted that the PCAOB's budget has increased by over 22%, relative to the SEC's appropriations since fiscal year 2021, and raised concerns about the PCAOB's spending, particularly the large increase in salaries.