Notice2023-27770
Order Approving Public Company Accounting Oversight Board Budget and Annual Accounting Support Fee for Calendar Year 2024
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 19, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 242 (Tuesday, December 19, 2023)</title>
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[Federal Register Volume 88, Number 242 (Tuesday, December 19, 2023)]
[Notices]
[Pages 87829-87830]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-27770]
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SECURITIES AND EXCHANGE COMMISSION
[Securities Act of 1933 Release No. 11258/December 13, 2023; Securities
Exchange Act of 1934 Release No. 99150/December 13, 2023]
Order Approving Public Company Accounting Oversight Board Budget
and Annual Accounting Support Fee for Calendar Year 2024
The Sarbanes-Oxley Act of 2002, as amended (the ``Sarbanes-Oxley
Act''),\1\ established the Public Company Accounting Oversight Board
(``PCAOB'') to oversee the audits of companies that are subject to the
securities laws, and related matters, in order to protect the
[[Page 87830]]
interests of investors and further the public interest in the
preparation of informative, accurate, and independent audit reports.
Section 982 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act \2\ amended the Sarbanes-Oxley Act to provide the PCAOB
with explicit authority to oversee auditors of broker-dealers
registered with the Securities and Exchange Commission (the
``Commission''). The PCAOB accomplishes these investor protection and
public interest goals through the registration of public accounting
firms, standard setting, inspections, and investigation and
disciplinary programs. The PCAOB is subject to the comprehensive
oversight of the Commission.
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\1\ 15 U.S.C. 7201 et seq.
\2\ Public Law 111-203, 124 Stat. 1376 (2010).
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Section 109 of the Sarbanes-Oxley Act provides that the PCAOB shall
establish a reasonable annual accounting support fee, as may be
necessary or appropriate to establish and maintain the PCAOB. Under
Section 109(f) of the Sarbanes-Oxley Act, the aggregate annual
accounting support fee shall not exceed the PCAOB's aggregate
``recoverable budget expenses,'' which may include operating, capital,
and accrued items. The PCAOB's annual budget and accounting support fee
are subject to approval by the Commission. In addition, the PCAOB must
allocate the annual accounting support fee among issuers and registered
brokers and dealers.
Section 109(b) of the Sarbanes-Oxley Act directs the PCAOB to
establish a budget for each fiscal year in accordance with the PCAOB's
internal procedures, subject to approval by the Commission. Rule 190 of
Regulation P (the ``Budget Rule'') governs the Commission's review and
approval of PCAOB budgets and annual accounting support fees.\3\ The
Budget Rule provides, among other things, a timetable for the
preparation and submission of the PCAOB budget and for Commission
actions related to each budget, a description of the information that
should be included in each budget submission, limits on the PCAOB's
ability to incur expenses and obligations except as provided in the
approved budget, procedures relating to supplemental budget requests,
requirements for the PCAOB to provide on a quarterly basis certain
budget-related information, and a list of definitions that apply to the
rule and to general discussions of PCAOB budget matters.
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\3\ 17 CFR 202.190.
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In accordance with the Budget Rule, in March 2023 the PCAOB
provided the Commission with a narrative description of its program
issues and outlook for the 2024 budget year. In response, the
Commission provided the PCAOB with general budgetary guidance for the
2024 budget year. The PCAOB subsequently delivered a preliminary budget
and budget justification to the Commission. Staff from the Commission's
Office of the Chief Accountant and Office of Financial Management
dedicated a substantial amount of time to the review and analysis of
the PCAOB's programs, projects, and budget estimates and participated
in a number of meetings with staff of the PCAOB to further develop the
understanding of the PCAOB's budget and operations. During the course
of this review, Commission staff relied upon representations and
supporting documentation from the PCAOB. Based on this review, the
Commission issued a ``passback'' letter to the PCAOB on October 30,
2023. On November 16, 2023, the PCAOB adopted its 2024 budget and
accounting support fee during an open meeting, and subsequently
submitted that budget to the Commission for approval.
After considering the above, the Commission did not identify any
proposed disbursements in the 2024 budget adopted by the PCAOB that are
not properly recoverable through the annual accounting support fee, and
the Commission believes that the aggregate proposed 2024 annual
accounting support fee does not exceed the PCAOB's aggregate
recoverable budget expenses for 2024.
The Commission continues to emphasize the importance of the PCAOB's
identification of efficiencies and process improvements. Accordingly,
the Commission requests that the PCAOB continue to evaluate its
operational efficiency, improvements, and budgetary needs and submit
such assessments to the Commission in connection with the 2025 budget
cycle.
Coordination between the SEC and PCAOB continues to be important.
The Commission directs the PCAOB during 2024 to continue to hold
monthly meetings, as necessary, with the Commission's staff to discuss
important policy initiatives, changes related to program areas, and
significant impacts to the PCAOB's 2024 budget, including significant
differences between actual and budgeted amounts and anticipated cost-
savings. Separately, the Commission directs the PCAOB to continue its
written quarterly updates on recent activities, including strategic
initiatives, for the PCAOB's Office of Economic and Risk Analysis;
Data, Security, and Technology group within the Office of the Chief
Operating Officer; and Division of Registration and Inspections. The
Commission expects the PCAOB to make itself available to meet with
individual Commissioners on these and other topics. Further, the
Commission requests that the PCAOB submit its 2023 annual report to the
Commission by March 29, 2024.
The Commission understands that the Office of Management and Budget
(``OMB'') has determined that the 2024 budget of the PCAOB is subject
to sequestration under the Budget Control Act of 2011.\4\ For 2023, the
PCAOB sequestered $19.9 million. That amount will become available in
2024. For 2024, the sequestration amount will be 5.7% or $21.9 million.
Consequently, we expect the PCAOB will have approximately $2.0 million
less funds available from the 2023 sequestration for spending in 2024.
Accordingly, the PCAOB should submit a revised spending plan for 2024
reflecting a $2.0 million reduction to budgeted expenditures as a
result of the increase in sequestration amount from 2023 to 2024.The
Commission has determined that the PCAOB's 2024 budget and annual
accounting support fee are consistent with Section 109 of the Sarbanes-
Oxley Act. Accordingly,
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\4\ OMB Report to the Congress on the BBEDCA 251A Sequestration
for Fiscal Year 2024 (Mar. 13, 2023), available at <a href="https://www.whitehouse.gov/wp-content/uploads/2023/03/BBEDCA_Sequestration_Report_and_Letter_3-13-2024.pdf">https://www.whitehouse.gov/wp-content/uploads/2023/03/BBEDCA_Sequestration_Report_and_Letter_3-13-2024.pdf</a>.
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It is ordered, pursuant to Section 109 of the Sarbanes-Oxley Act,
that the PCAOB budget and annual accounting support fee for calendar
year 2024 are approved.
By the Commission.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2023-27770 Filed 12-18-23; 8:45 am]
BILLING CODE 8011-01-P
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