The Public Company Accounting Oversight Board approved its budget for 2006, which will also allow for a reduction in the support fees paid by publicly traded companies.
The board also approved technical amendments to its ethics and independence rules regarding tax services, though those do not change the substance of the rules.
The $128.4 million budget for 2006 projects that the board will assess $109.3 million in accounting support fees, as opposed to $136.1 million in 2005. The majority of the board's outlays will be for salaries and related expenses, primarily related to the hiring and retention of the auditors needed to conduct inspections of registered public accounting firms.
To date, 1,586 public accounting firms have registered with the PCAOB, including 640 firms based outside the United States.
By the end of 2005, the PCAOB estimates its total headcount will be 427, with a total inspections staff of 200. The PCAOB expects to add about 100 employees by the end of 2006, most of them joining the inspections staff. Separately, the board revoked the registrations of two auditing firms, citing their failure to adhere to public company audit standards.The PCAOB cited Clyde Bailey PC, a Texas-based firm, and Kenny H. Lee CPA Group Inc., in California. The two firms will no longer be able to audit public companies. Meanwhile, firm principals Clyde Bailey and Kwang Ho Lee will be prohibited from working for public-company audit firms.
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