PCAOB Approves Budget for 2011

The Public Company Accounting Oversight Board (PCAOB) announced that it has approved its $204.4 million budget for 2011, $21.1 million more than its budget for 2010. More than half of the 11.5 percent increase is to address the PCAOB’s new oversight of auditors of broker-dealers, as delineated by the Dodd-Frank Act.

The majority of the new expenses in the budget are for increases in staffing, information technology and facilities because of the additional responsibilities of the PCAOB in 2011. Among those responsibilities are creating a program to oversee broker-dealer audits, enhanced requirements for performing and documenting inspections and the possibility for increased litigated enforcement proceedings.

According to the Sarbanes-Oxley Act of 2002, auditors of broker-dealers were required to register with the PCAOB, but the Dodd-Frank Act expands that authority to standard setting, enforcement, inspection and disciplinary measures.

“While the board may ultimately conclude that the auditors of some categories of brokerage firms should be exempted from oversight, creating a program to oversee broker-dealer audits will be a major undertaking and will require significant resources,” said Daniel L. Goelzer, acting PCAOB chairman, in the PCAOB’s statement.

In addition to the new budget, the PCAOB approved its strategic plan for 2010 through 2014.

“Approving a new blueprint for the coming five years in tandem with the annual budget promotes a better alignment between the plan and the budget and assists the board to think strategically about what it needs to accomplish with its available resources,” Goelzer said.

The PCAOB is a nonprofit organization established by Congress to oversee the audits of public companies in order to protect the interests of investors. The new budget is subject to approval by the Securities and Exchange Commission.