SEC OKs slimmer budget and salaries for PCAOB

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The Securities and Exchange Commission approved a decreased budget for the Public Company Accounting Oversight Board for 2026 along with a reduced accounting support fee and salaries for the PCAOB's board members and chair.

The total budget for the year for the audit firm regulator will be $362.1 million, as approved by the PCAOB members last month. That translates into a 9.4% reduction of $37.6 million from last year's $399.7 million budget. The SEC also approved a 42% reduction in the salaries paid to the PCAOB board members and 52% for the PCAOB chair. The accounting support fee paid by public company issuers and broker-dealers to support the work of the PCAOB totals $306.0 million, an 18.4% ($68.9 million) decrease from the prior year, of which $280.3 million will be assessed on public company issuers and $25.7 million will be assessed on brokers and dealers.

The decrease in the PCAOB budget comes after SEC chairman Paul Atkins asked former PCAOB chair Erica Williams to resign last year and announced plans to begin looking for a slate of new PCAOB board members. PCAOB board member Christina Ho announced last month her intention to resign by the end of January or whenever a successor is appointed for her position, whichever comes earlier. The search for new board members was delayed by the 43-day government shutdown last fall, but AICPA president and CEO Mark Koziel said in a speech yesterday at the Accountants Club of America that he expects the new board members to be announced in February.

"Both during my time as a commissioner and now as chairman, I have recognized — and continue to recognize — the importance of driving improvements in audit quality," Atkins said in a statement Thursday. "Nevertheless, all regulators, including the Commission and the PCAOB, must continually assess how and whether current approaches to fulfilling the Board's responsibilities provide benefits to investors without imposing excessive burdens on businesses. For the Commission, its diligent oversight of the PCAOB is a crucial check on the considerable authority that the board holds over audit firms and the risks of potentially excessive burdens. A significant aspect of this oversight is the Board's budget. The PCAOB must exhibit a strong commitment to responsible stewardship of the accounting support fee, which is its primary source of funding and functions as a tax on public companies and broker-dealers. This includes being mindful of and transparent about material investments so that the Commission can appropriately exercise our budget oversight responsibilities. The decrease in this year's budget does not detract from the significance of the PCAOB's mission, which remains crucial; rather, it underscores that fiscal discipline and regulatory effectiveness complement each other."

Even a reduced budget in a way represents a victory for the PCAOB, which narrowly escaped being eliminated under the One Big Beautiful Bill Act. Congressional Republicans had included a provision transferring the responsibilities of the PCAOB to the SEC, but the Senate parliamentarian stripped out that provision before it came up for a vote in the Senate last June.

Nevertheless, Atkins and SEC chief accountant Kurt Hohl are planning major changes at the PCAOB, including a new approach in the inspection process aimed more at the quality management system at firms.

"This year's budget decrease represents progress," Hohl said in a statement. "However, the ongoing initiatives by the Commission and PCAOB to re-assess the PCAOB's strategic plan, operations, and budget remain key priorities for the future. The SEC remains committed to robust oversight of the PCAOB and ensuring that its operations are transparent, justified and worthy of the trust placed in it by investors and the public."