The Public Company Accounting Oversight Board is regrouping with a slate of new board members recently appointed by the Securities and Exchange Commission, and it approved its
Earlier this month, the SEC named one of its longtime officials, Erica Williams, as the new PCAOB chair and appointed three new members: Christina Ho, Kara Stein and Anthony Thompson as board members, while allowing Duane DesParte to continue serving as a board member and remaining acting chairperson until Williams is sworn in (
Now the PCAOB is regrouping. Stein, a former SEC commissioner, and Ho, a former Treasury official and Deloitte executive, have since been sworn in. DesParte is still acting chair of the board and presided over Tuesday’s meeting of the three current board members.
The 2022 budget is $310.3 million (funding 891 positions), as compared to the 2021 budget of $287.3 million (funding 859 positions). The 2022 budget includes investments to improve the PCAOB’s oversight activities, stakeholder engagement, business processes, and IT infrastructure. The increased funding level in 2022 mainly reflects cost increases due to inflation, extra staff positions mostly to support inspections and standard-setting activities, and higher travel costs in anticipation of travel resuming in 2022 after it was halted by the pandemic.
"Our budget sets forth the resources required to enable the board and our dedicated staff to fulfill our statutory mandate and drive continuous improvement in audit quality through proactive, responsive, and innovative oversight,” DesParte said in a statement.
The PCAOB based its budget on the current five-year strategic plan that was developed while Duhnke was chairing the board. But with the ongoing leadership transition underway at the PCAOB, the board expects to reassess its strategic goals and priorities in 2022. The budget is still subject to approval by the SEC.
One expectation is that the PCAOB will be doing more outreach to investors after the board suspended meetings of its Investor Advisory Group in 2018, as well as finishing up some of the standards that have long been under development, while also looking into the emerging area of environmental, social and governance reporting.
“I am also supportive of the additional resources included in the budget for completing new audit standards, researching further uses of data and technology, and evaluating developments in the ESG metrics and assurance space,” said Stein. “This budget also recommits funds towards investor and other stakeholder outreach, both for events and advisory group activities. This is critically important to our mission of protecting investors and the integrity of the capital markets. Although I am supporting today’s proposed budget, I plan to work closely with my fellow Board members and our new chair, Erica Williams, to reassess the PCAOB’s strategic plan, and determine if additional staffing and resources may be needed in the months ahead.”
The PCAOB also plans to increase its use of technology. “In particular, I am interested in working with the board to identify ways to advance data-driven decision making across our programs including inspections, enforcement and standard setting,” said Ho. “The PCAOB collects large amounts of data through its inspections and other processes. By leveraging PCAOB’s data as well as data made publicly available by the SEC and others, we may be able to more effectively inform standard-setting priorities and predict the risks of audit deficiencies and violations. As a result, we could use our resources more efficiently to further improve audit quality and protect investors.”
