On 18 December 2024, the United States Securities and Exchange Commission (US SEC) approved the 2025 budget of the Public Company Accounting Oversight Board (PCAOB), amounting to $399.7 million, alongside the corresponding annual accounting support fee. The accounting support fee, totalling US$374.9 million, will be distributed among public company issuers ($346.1 million) and registered broker-dealers (US$28.8 million). The PCAOB was established by the United States Sarbanes-Oxley Act of 2002 to enhance trust in financial reporting by overseeing the audits of public companies and broker-dealers. Its responsibilities include setting auditing standards, conducting inspections, and investigating and disciplining auditors. The US SEC maintains oversight of the PCAOB, approving its budget annually to ensure its activities align with investor protection and public interest goals.
For 2025, the PCAOB submitted its budget proposal to the US SEC after a rigorous review process. The US SEC’s Office of the Chief Accountant and Office of Financial Management conducted extensive evaluations of the PCAOB’s programs, projects, and budget estimates before issuing a passback letter in October 2024. Following these consultations, the PCAOB adopted its final budget in November 2024. The PCAOB’s accounting support fee for 2025 totals $374.9 million, representing its aggregate recoverable budget expenses. This fee will be assessed on issuers and registered broker-dealers based on their proportionate share of public financial activity. The US SEC emphasised the importance of operational efficiency and requested that the PCAOB continue identifying cost-saving measures and process improvements. This includes holding quarterly meetings with US SEC staff to discuss policy changes, budget variances, and anticipated cost reductions. The PCAOB’s budget for 2025 is subject to sequestration under the United States Budget Control Act of 2011. With a sequestration amount of $22.8 million (5.7%), the PCAOB has been directed to submit a revised spending plan reflecting a $0.9 million reduction in expenditures.
The PCAOB’s 2025 budget takes effect on 1 January 2025, with quarterly updates and ongoing evaluations required throughout the year. By 31 March 2025, the PCAOB must submit its annual report, providing detailed insights into its progress and challenges. The US SEC has requested revised spending plans and a closer evaluation of the budgetary impact of sequestration adjustments.
(Source: https://www.sec.gov/newsroom/press-releases/2024-204, https://www.sec.gov/files/rules/other/2024/33-11345.pdf)
