SEC approves PCAOB budget of $384.7M for 2024

The Securities and Exchange Commission approved the 2024 budget of the Public Company Accounting Oversight Board, totaling $384.7 million, with an accounting support fee totaling $358.8 million.

That’s a 10% increase over the 2023 budget of $349.5 million, and a roughly 9% increase over the previous support fee.

For the accounting support fee, $331.0 million will be assessed on public company issuers and $27.8 million will be assessed on registered broker-dealers. 

“A critical feature of our capital markets is that investors rely on public company disclosures, including their financial results,” said SEC chair Gary Gensler in a statement Wednesday. “Essential to investors’ trust in the reliability of such financial information is an independent audit of issuers’ financial statements. Congress understood this when they passed the Sarbanes-Oxley Act of 2002 in response to some of the largest accounting frauds and bankruptcies in the history of our country. I support this $385 million budget — supporting a modest 2% increase in headcount — because of the important role the PCAOB plays in protecting investors and facilitating capital formation.”

PCAOB chair Erica Williams appeared before an open meeting of the SEC regarding the proposed 2024 budget, which will fund 946 positions, and explained the impact of the annual support fee. “While the 2024 budget does increase the ASF overall, there is minimal impact on individual entities billed,” she said. “Based on experience, we anticipate the smallest billable entities will see no increase, while the median difference per bill will likely be only $200.”

Williams also spoke during a congressional hearing Tuesday where she was challenged by lawmakers about the PCAOB’s proposed standard on noncompliance with laws and regulations, or NOCLAR, which has provoked opposition from the Center for Audit Quality and business groups such as the U.S. Chamber of Commerce. The House Financial Services Subcommittee on Capital Markets chair presiding over the hearing, Rep. Ann Wagner, R-Missouri,  pointed out that over the last few years, more than 300,000 auditors and accountants have left their positions, with many of them citing the regulatory environment as a main factor for leaving, and the NOCLAR proposal is anticipated to have a significant financial impact, with estimates indicating a substantial increase in auditing fees by $18.2 billion, according to the U.S. Chamber of Commerce, and overall compliance costs possibly reaching upwards of $83 billion. 

“The NOCLAR proposal right now is just at the proposal stage,” Williams responded. “It is critical for us to make sure that we are getting public comment on the proposals so that we can make sure that we get the final rule right.”

She added that the PCAOB has included an economic analysis in the proposal and plans to hold a public roundtable hearing on the proposal next year to get further feedback.