In a meeting on Friday, the members of the Public Company Accounting Oversight Board voted to approve a 2026 budget of $362.1 million—a 9% decrease from 2025.
In presenting the budget, acting chief operating officer Randy Thornton explained that, while the 2026 proposal of $362.1 million was well below the 2025 budget of $399.7 million, "I want to note that as we end the year, our 2025 spending is itself actually running about 6% below budget, and the 2026 budget is actually about a 4% reduction from the estimated 2025 spend."
He then broke down the main areas of proposed spending:
- Personnel: $272.9 million, or 75% of the total budget;
- Consulting and professional fees: $28.5 million, or 8%;
- Rent and facilities: $20 million, or 5%;
- IT expenses: $16.2 million, or approximately 5%;
- Travel: $15.9 million, or 4% (93% of which is for inspection-related travel); and,
- Administrative costs: $8.8 million, or 2%.
"The budget includes salary reductions for our most highly compensated staff, but not for most of our staff, and very substantial salary reductions for board members," Thornton noted.
The board also expects a reduction of headcount over the course of the year of 47 people, bringing the board down to a total of 817 employees.
The budget proposes an 18% reduction in the accounting support fee that is assessed on public issuers and brokers and dealers to pay for the PCAOB, from $374.9 million to $306 million. Of that, $280.3 million will be assessed on issuers, and $25.7 million on brokers and dealers.
"I believe the PCAOB is a cost-effective means of protecting investors," said acting chair George Botic. "But I also believe it is vitally important that the PCAOB be a good steward of its resources, and not overlook the fact that its operations are funded primarily from the annual support fee."
With that in mind, he noted, "I want to highlight the fact that this budget will reduce annual board member salaries by 52% for the chair, and 42% for the other board members. As a result of these reductions, the accounting support fee to be paid by public companies and registered brokers and dealers in 2026 will be 18.4% less than in 2025."
Botic also pointed out that the proposed reduction in spending does not represent a complete about-face.
"The 2026 budget is not as sharp a dropoff as it might appear at first," he said. "Rather, it is a continuation of belt-tightening that is already under way."
Not all the board members were convinced the belt-tightening goes far enough, however.
"I believe we have missed an opportunity by not taking a more targeted and strategic approach to incorporating in the 2026 budget more cost-saving reductions in our programs and operations," said board member Christina Ho. "Looking forward, I believe each division and office director should proactively look for and identify spending reductions within their areas. Division and office directors and their staff who are on the front lines of our programs and operations, have considerable insight into where efficiencies can be improved and costs can be reduced without compromising our mission."
"I realize that doing so might be painful, particularly when personnel are affected," acknowledged Ho, who is
She pointed to President Trump's management agenda, which calls for the elimination of unnecessary federal jobs.
"While the PCAOB is not a federal agency, the PCAOB could have, and now should take sharper pencil in eliminating jobs that are no longer essential," she said. "While the approximately 9% decrease is not insignificant, it pales in comparison to the approximately 40% increase in the PCAOB's budget between 2022 and 2025."
She said that the PCAOB has "padded" its budget in the past, recalling her dissenting vote for the 2025 budget.
"The PCAOB could have, and should have, a deeper budget decrease than the 9% decrease before us today," she said, before voting to approve it.
The budget will be forwarded to the Securities and Exchange Commission for its approval.
