
[Federal Register: December 29, 2009 (Volume 74, Number 248)]
[Notices]               
[Page 68876-68877]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29de09-128]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 9099; Release No. 61212]

 
Order Approving Public Company Accounting Oversight Board Budget 
and Annual Accounting Support Fee for Calendar Year 2010

    Securities Act of 1933, Release No. 9099/December 22, 2009.
    Securities Exchange Act of 1934, Release No. 61212/December 22, 
2009.

    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'').
    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 2009 the PCAOB 
provided the Commission with a narrative description of its program 
issues and outlook for the 2010 budget year. In response, the 
Commission staff provided to the PCAOB staff economic assumptions and 
budgetary guidance for the 2010 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 2009 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 2010 budget on November 30, 2009 
and submitted that budget for Commission approval.
    After considering the above, the Commission did not identify any 
proposed disbursements in the 2010 budget adopted by the PCAOB that are 
not properly recoverable through the annual accounting support fee, and 
the Commission believes that the aggregate proposed 2010 annual 
accounting support fee does not exceed the PCAOB's aggregate 
recoverable budget expenses for 2010. 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 2010 PCAOB budget, the Commission 
notes that there are certain budget-related matters that should be 
addressed or more closely monitored during 2010. These matters relate 
to: (1) The PCAOB's inspections program; (2) its information technology 
programs; and (3) potential legislative actions that could impact the 
PCAOB. Because of the importance of each of these matters, the 
Commission deems it necessary to set forth the following specific 
measures.

[[Page 68877]]

    Accordingly, with respect to the PCAOB's 2011 budget cycle, the 
PCAOB will:
    (1) Continue to include in its quarterly reports to the Commission 
information about the PCAOB's inspections program. Such information 
will include (a) statistics relative to the numbers and types of firms 
budgeted and expected to be inspected in 2010, including by location 
and by year the inspections are required to be conducted in accordance 
with the Act and PCAOB rules, (b) information about the timing of the 
issuance of inspections reports for domestic and non-U.S. inspections, 
and (c) 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, including the annual and special 
reporting system and the inspections information system.
    (3) Consult with the Commission about the PCAOB's plans for 
implementing any changes in response to legislative actions.
    The Commission has determined that the PCAOB's 2010 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 2010 are 
approved.

    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-30726 Filed 12-28-09; 8:45 am]

BILLING CODE 8011-01-P
