The Public Company Accounting Oversight Board voted Thursday to approve a new budget for fiscal year 2024, and revealed it surpassed last year’s record amount of fines against auditors and audit firms.
As of Nov. 14, 2023, total fines imposed by the PCAOB reached $11.9 million for the year, surpassing last year’s record-breaking total of $11 million, with several weeks left to go in the year (and almost $4 million announced this week). The 2023 penalties are already more than double the total penalties in each of the five years before the PCAOB’s record-breaking year in 2022.
The PCAOB’s strategic plan for 2022-2026 includes modernizing standards, enhancing inspections, strengthening enforcement, and improving organizational effectiveness.
“Last year through our enforcement program we imposed the highest penalties in PCAOB history against those who put investors at risk,” said chair Erica Williams Thursday during a meeting to approve the 2024 budget. “This week we surpassed that record with $11.9 million in penalties against wrongdoers — and the year is not over. Our 2023 penalties are already more than double the total penalties in each of the five years before our record-breaking year in 2022. This budget provides us with the resources to continue to strengthen our enforcement program as we use all the tools in our toolbox to conduct investigations and bring enforcement actions to protect investors and drive deterrence.”
The PCAOB has also made progress on standard-setting and inspections. This year, the board took more formal actions on standard-setting and rulemaking than any year in the past 10 years, issuing four proposals, with one more expected to be considered before the end of the year, and it has adopted a final confirmation standard and related amendments that had previously been stalled since 2010.
By the end of 2023, the PCAOB will have considered five proposals, more than any single year in its history since the first set of standards and rules were proposed in 2003, after it was established by the Sarbanes-Oxley Act of 2002.
The PCAOB also enhanced its inspection reports this year to add more transparency, including a new section on auditor independence and a range of other improvements to make the reports more transparent and useful. In addition, the board added a set of new features to its website to help investors, audit committee members and others compare inspection report data among firms.
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