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January 10, 2012

PCAOB to defend budget increase before the SEC

The US Securities and Exchange Commission (SEC) will question US audit watchdog chairman James Doty regarding a request to increase the body’s budget for 2012.

The Public Company Accounting Oversight Board (PCAOB) has requested its budget be increased to $227.7m in 2012, which is an 11% increase from its $204.4m budget in 2011.

Doty, who has been the watchdogs chairman for a year, is expected to argue the increase is necessary for PCAOB’s projects such as the growing number of non-US inspections.

In its budget and strategic plan for 2012 the PCAOB said it needed an additional 98 staff. The division of registration and inspections would account for 90 of those new hires, according to the board’s budget statement in November 2011.

The PCAOB is currently also involved in examining a mandatory audit firm rotation proposal and is hoping to reach an agreement with the Chinese regulators enabling cross-boarder inspections, which has thus far proved to be challenging.

This is the fifth time since the creation or the PCAOB in 2002 that the budget has gone to public vote.

The PCAOB is subsidised by the fees imposed on public companies and broker-dealers, however this needs to be approved by the SEC.

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