

[Federal Register: April 19, 2006 (Volume 71, Number 75)]
[Notices]               
[Page 20143]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19ap06-142]                         

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SECURITIES AND EXCHANGE COMMISSION

[Securities Act of 1933 Release No. 8676]
[Securities Exchange Act of 1934 Release No. 53641]

 
Order Approving Public Company Accounting Oversight Board Budget 
and Annual Accounting Support Fee for Calendar Year 2006

April 13, 2006.
    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 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'').
    The PCAOB adopted a budget for calendar year 2006 on November 22, 
2005 and submitted it to the Commission for approval on January 24, 
2006. In accordance with its responsibilities to oversee the PCAOB, the 
Commission reviewed the budget proposed by the PCAOB for 2006 and its 
aggregate accounting support fee for 2006, which will fund the PCAOB's 
expenditures.
    In an effort to address any issues relating to the PCAOB's proposed 
budget for 2006 before it was approved by the PCAOB and submitted to 
the Commission for review and approval, the Commission's review of the 
PCAOB's proposed budget for 2006 began in August 2005 with a meeting 
between Commission and PCAOB staffs to discuss the types of supporting 
information the Commission would need to begin its review of the 
PCAOB's 2006 budget, including questions to be addressed by the PCAOB 
regarding its proposed budget and accounting support fee. Also, prior 
to the PCAOB's final consideration of its 2006 budget estimates and 
approval of its proposed budget for 2006, the PCAOB board members met, 
either in person or by phone, with each Commissioner to discuss the 
PCAOB's development of a strategic plan and other matters impacting the 
PCAOB's budget. In December, shortly after the PCAOB approved its 
proposed budget for 2006, the PCAOB briefed the Commission staff on its 
inspection program for 2005 and its plans for 2006 and provided 
responses to the staff's questions regarding its inspection program.
    Over the course of the Commission's review, staff from the 
Commission's Offices of the Chief Accountant, Executive Director and 
Information Technology dedicated a substantial amount of time to the 
review and analysis of the PCAOB's programs, projects and budget 
estimates, and attended several meetings with board members, 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.
    After considering the above, the Commission did not identify any 
proposed disbursements in the budget that are not properly recoverable 
through the annual accounting support fee, and the Commission believes 
that the aggregate proposed 2006 annual accounting support fee does not 
exceed the PCAOB's aggregate recoverable budget expenses for 2006.
    Based on the foregoing, the Commission has determined that the 
PCAOB's 2006 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 2006 are 
approved.

    By the Commission.
Nancy M. Morris,
Secretary.
[FR Doc. E6-5796 Filed 4-18-06; 8:45 am]

BILLING CODE 8010-01-P
