[Federal Register Volume 73, Number 247 (Tuesday, December 23, 2008)]
[Notices]
[Pages 78861-78862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-30431]


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SECURITIES AND EXCHANGE COMMISSION

[Securities Act of 1933 Release No. 8989/Securities Exchange Act of 
1934 Release No. 59113]


Order Approving Public Company Accounting Oversight Board Budget 
and Annual Accounting Support Fee for Calendar Year 2009

December 17, 2008.
    The Sarbanes-Oxley Act of 2002 (the ``Act'') established the Public 
Company Accounting Oversight Board (``PCAOB'') to oversee the audits of 
public companies and related matters, to protect investors, and to 
further the public interest in the preparation of informative, accurate 
and independent audit reports. The PCAOB is to accomplish these goals 
through registration of public accounting firms and standard setting, 
inspection, and disciplinary programs. Section 109 of the 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. Section 109(h) amends Section 13(b)(2) of the Securities 
Exchange Act of 1934 to require issuers to pay the allocable share of a 
reasonable annual accounting support fee or fees, determined in 
accordance with Section 109 of the Act. Under Section 109(f), the 
aggregate annual accounting support fee shall not exceed the PCAOB's 
aggregate ``recoverable budget expenses,'' which

[[Page 78862]]

may include operating, capital and accrued items. Section 109(b) of the 
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 Securities and Exchange Commission (the ``Commission'').
    On July 18, 2006, the Commission amended its Rules of Practice 
related to its Informal and Other Procedures to add a rule to 
facilitate the Commission's review and approval of PCAOB budgets and 
accounting support fees.\1\ This 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 furnish 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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    \1\ 17 CFR 202.11 See Release No. 33-8724 (July 18, 2006) [71 FR 
41998 (July 24, 2006)].
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    In accordance with the budget rule, in March 2008 the PCAOB 
provided the Commission with a narrative description of its program 
issues and outlook for the 2009 budget year. In response, the 
Commission staff provided to the PCAOB staff economic assumptions and 
budgetary guidance for the 2009 budget year. The PCAOB subsequently 
delivered a preliminary budget and budget justification to the 
Commission. Staff from the Commission's Offices of the Chief Accountant 
and Executive Director dedicated a substantial amount of time to the 
review and analysis of the PCAOB's programs, projects and budget 
estimates; reviewed the PCAOB's estimates of 2008 actual spending; and 
attended several meetings with management and staff of the PCAOB to 
develop an understanding of the PCAOB's budget and operations. During 
the course of the Commission's review, the Commission staff relied upon 
representations and supporting documentation from the PCAOB. Based on 
this comprehensive review, the Commission issued a ``pass back'' letter 
to the PCAOB. The PCAOB approved its 2009 budget on November 25, 2008 
and submitted that budget for Commission approval.
    After considering the above, the Commission did not identify any 
proposed disbursements in the 2009 budget adopted by the PCAOB that are 
not properly recoverable through the annual accounting support fee, and 
the Commission believes that the aggregate proposed 2009 annual 
accounting support fee does not exceed the PCAOB's aggregate 
recoverable budget expenses for 2009. The Commission looks forward to 
the PCAOB's annual updating of its strategic plan and the opportunity 
for the Commission to review and provide views to the PCAOB on a draft 
of the updated plan.
    As part of its review of the 2009 PCAOB budget, the Commission 
notes that there are certain budget-related matters that should be 
addressed or more closely monitored during 2009. These matters relate 
to the PCAOB's inspections program, its information technology 
programs, and recommendations of the Department of the Treasury's 
Advisory Committee on the Auditing Profession that relate to the PCAOB. 
Because of the importance of each of these matters, the Commission 
deems it necessary to set forth the following specific measures.
    Accordingly, with respect to the PCAOB's 2010 budget cycle, the 
PCAOB will:
    (1) Include in its quarterly reports to the Commission information 
on the PCAOB's fulfillment of its 2009 budgeted inspection plan. Such 
information will include updated statistics relative to the numbers and 
types of firms budgeted and expected to be inspected in 2009, including 
by location and by year the inspections are required to be conducted in 
accordance with the Act and PCAOB rules. This information also will 
include updates on the PCAOB's efforts to establish cooperative 
arrangements with respective non-U.S. authorities for inspections 
required in those countries;
    (2) Continue to include detailed information about the state of the 
PCAOB's information technology in its quarterly reports to the 
Commission, including planned, estimated, and actual costs for 
information technology projects such as the proposed annual and special 
reporting system and the proposed inspections information system; and
    (3) Consult with the Commission about the PCAOB's plans for 
implementing the recommendations of the Department of Treasury's 
Advisory Committee on the Auditing Profession, including estimated and 
actual costs for each item proposed to be implemented. The consultation 
will include the PCAOB submitting a project plan and justification to 
the Commission and the opportunity for the Commission to provide views 
to the PCAOB regarding such plan.
    The Commission has determined that the PCAOB's 2009 budget and 
annual accounting support fee are consistent with Section 109 of the 
Act. Accordingly,
    It is ordered, pursuant to Section 109 of the Act, that the PCAOB 
budget and annual accounting support fee for calendar year 2009 are 
approved.

    By the Commission.
Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-30431 Filed 12-22-08; 8:45 am]
BILLING CODE 8011-01-P