Document ID: SEC-2023-1465-0001
Agency: sec
Document Type: Notice
Title: Order: Approving Public Company Accounting Oversight Board Budget and Annual Accounting Support Fee for Calendar Year 2024
Posted Date: 2023-12-19T05:00Z

[Federal Register Volume 88, Number 242 (Tuesday, December 19, 2023)]
[Notices]
[Pages 87829-87830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[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 https://www.whitehouse.gov/wp-content/uploads/2023/03/BBEDCA_Sequestration_Report_and_Letter_3-13-2024.pdf.
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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