Statement on PCAOB 2026 Budget

The Commission voted today to approve the 2026 budget for the Public Company Accounting Oversight Board (the "PCAOB" or "Board") and the related accounting support fee. The 2026 PCAOB budget totals $362.1 million, reflecting a 9.4 percent ($37.6 million) decrease from the prior year.[1] I support this budget and recognize its importance as an initial step in refocusing the PCAOB on its core mission.

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. 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.

In 2007, during my final vote on a PCAOB budget before leaving the Commission, I highlighted two main concerns, which I will briefly revisit now.

The first concern was the high salaries of the PCAOB Board members, prompting me to reject the budget that year. I highlighted then that "[t]he SEC can and must provide objective oversight with respect to the Board's salaries. If we do not oversee those, nobody else can."[2]This budget, I believe, addresses this first concern, reducing the chairman's and other Board members' compensation by 52 percent and 42 percent, respectively. This action demonstrates a clear commitment to aligning PCAOB Board pay more closely with the ethos of public service that reinforces trust, demonstrates fiscal responsibility, and affirms the honor of stewardship over the capital markets.

My second concern stemmed from the PCAOB's lack of a long-term strategic plan, which I firmly advocated for, and that the Commission required the PCAOB to develop starting in 2007.[3]I believed then and still believe today that a robust strategic plan is necessary to ensure that the PCAOB's growth and budget aligns with its statutory role. Effective budgeting requires a strategic plan that considers the broader context, sets clear objectives, identifies gaps between goals and the current status, and provides an action plan with clear, transparent, and measurable benchmarks.

The development of an updated strategic plan is a key priority for 2026. I look forward to working with the PCAOB Board and the Commission's Chief Accountant to create a comprehensive strategic plan that will get the PCAOB back to basics: focusing on integrity and objectivity of the profession, reducing unnecessarily complex regulations, and re-centering this important institution on its core statutory responsibilities.

The Commission remains committed to robust oversight of the PCAOB and to ensuring that its operations are transparent, justified, and worthy of the trust placed in it by investors and the public.

I would like to thank PCAOB Acting Chairman George Botic, as well as PCAOB Board Members Kara Stein, Anthony Thompson, and Christina Ho, for their hard work in preparing this budget given the time constraints and delays caused by the government shutdown and for their responsiveness to the Commission's feedback.

I would also like to thank my colleagues at the SEC for their dedicated efforts on this matter, including:

Kurt Hohl, Duc Dang, Anita Doutt, Shaz Niazi, Fariba Nasary, Taylor Pross, Greg Hillson, and Mark Jacoby from the Office of the Chief Accountant;

Caryn Kauffman, Crystal Willis, and Adam Salazar from the Office of Financial Management;

Bryant Morris, Dorothy McCuaig, and Eduardo Aleman from the Office of the General Counsel; and

Greg Schulze and Bobby Sharma from the Office of Information Technology.