SEC Approves PCAOB's Proposed 2025 Budget On December 18, 2024, the SEC approved the PCAOB's proposed 2025 budget and the related annual Accounting Support Fee (ASF). The SEC voted 3-2 to approve the budget proposal, with Democratic Commissioners Caroline Crenshaw and Jaime Lizárraga joining Chair Gary Gensler to cast votes in favor of the $399.7 million request and Republican Commissioners Mark T. Uyeda and Hester M. Pierce dissenting.
The proposed budget includes funding for 945 positions, one less position than what was requested in 2024. The budget also includes a projected ASF of $374.9 million, comprised of $346.1 million for issuers and $28.8 million for broker-dealers. In an SEC Open Commission Meeting on December 18, PCAOB Chair Erica Y. Williams reported that while the projected ASF represents a necessary increase compared to 2024, the PCAOB anticipates the smallest billable issuers will see no increase, while the median difference per bill for issuers will likely be $100. In support of the request, Williams highlighted the PCAOB's work in China, noting that the staff inspected 79 international firms and more than 220 international audits, including audits of firms in Mainland China and Hong Kong. Williams also reported that the budget will be put toward the PCAOB's continuing efforts to support inspections staff, modernize standards, strengthen enforcement, and improve organizational effectiveness. In his dissenting statement, Commissioner Uyeda questioned the PCAOB's increase in budget relative to the SEC's (from 15.2% in 2021 to 18.6% in 2025) and the budget's $13.9 million increase in PCAOB salaries.
The other dissenting Commissioner (Hester M. Pierce) questioned whether the PCAOB's increasing budget was having a net positive effect on audit quality given the corresponding increase in aggregate deficiency rates from inspections and fines. In her dissenting statement, Commissioner Pierce also criticized the PCAOB for "trumpeting" increases in deficiency rates and fines as evidence of the importance of its work, arguing that this approach was "misguided" and "destined to drive inspection deficiencies and enforcement fines even higher."
The SEC press release can be found here, PCAOB Chair William's remarks can be found here, Commissioner Uyeda's statement can be found here and Commissioner Pierce's statement can be found here.
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