The Securities and Exchange Commission approved the budget of the independent accounting board on Tuesday. The budget is allotted for the auditing watchdog that oversees the function of the leading United States accounting firms.
According to Yahoo! News, the Securities and Exchange Commission staff made a recommendation to approve the budget of the Public Company Accounting Oversight Board or the PCAOB. Included with the approval is the endorsed $257.7 million budget of SEC Commission Chairwoman Mary Jo White and Commissioner Kara Stein.
However, CNBC reported that SEC commissioner Michael S. Piwowar voted against the proposed budget for the accounting board. He said that he was sceptical of the almost 3 percent increase in the PCAOB budget a year ago.
He also added that he was not encouraged and persuaded that the additional burden on the accounting firms and broker-dealers, which fund the PCAOB through charges, already gained advantage. "The Commission represents the only safeguard to an otherwise unilateral ability to impose the accounting support fee on companies and broker-dealers," he said.
On the other hand, the SEC is tasked to control the budget and to assign members of the PCAOB, which was conceived to prevent future accounting scandals like the one that caused the downfall of energy company Enron in 2001. The SEC has two vacancies and the Senate Banking Committee is due to consider two nominees put forward by the White House on Tuesday, as noted by Reuters.
Moreover, at the opening remarks at the Open Meeting to consider the proposed budget and accounting support fee for 2016, the SEC commissioner also claimed, "Over a decade ago, a series of sensational accounting scandals exposed severe weaknesses in our accounting and financial reporting system." She added, "Ultimately, a number of large companies collapsed after revelations about their fictitious accounting. This raised concerns about the public's confidence in financial reporting, in the capital markets, and particularly, regarding the role of the public's gatekeepers, the auditors."
Meanwhile, the current PCAOB Chairman James Doty's term expired last fall. The Commission Chair Mary Jo White insists that she intends to wait until the agency once again has its full, five-member panel prior to moving forward to appoint a new PCAOB chief.
