Statement on the PCAOB 2018-2022 Strategic Plan and 2019 Budget

Nov. 15, 2018
Kathleen M. Hamm, Board Member
PCAOB Open Board Meeting

This year marks the crystal anniversary for the PCAOB. For the first time in 15years, we have an entirely new board. By design, the Securities and Exchange Commission brought together five professionals with diverse skills and unique perspectives. The commission's directive was clear: we were to bring our distinct capabilities and experiences to the job and work in a collegial and collaborative manner to assess the PCAOB's activities and operations. Then together we were to determine the organization's strategic direction and chart its course for long-term success.

Over the past seven months, we have been reevaluating the PCAOB's programs and processes from bottom to top. We received input through a public survey and dozens of in-depth one-on-one meetings with our stakeholders.

We heard from investors, audit committee and board members, chief financial officers, and others who play significant roles in preparing financial statements. We spoke with auditors from an array of firms. Academics and foreign regulators weighed in as well.

SEC Chairman Clayton, the other SEC commissioners—along with the Office of the Chief Accountant—were generous with their insights and guidance. The PCAOB staff also patiently imparted their deep subject matter expertise.

The general consensus in the marketplace affirms that, since the establishment of the PCAOB, audit quality has substantially improved and restatements of financial statements are dramatically down. But we know that more needs to be done.

The strategic plan that we are voting on here today establishes our collective view not only on how to further improve audit quality. It also establishes our vision on how to transform the PCAOB into a more agile, innovative regulator in pursuit of our mission. A mission grounded in protecting investors and the public interest through the preparation of informative, accurate, and independent audit reports.

Our strategic goals are clear. We are committed to raising the bar on audit quality through a combination of prevention, detection, deterrence, and enforcement. We are positioning the PCAOB to better anticipate and adapt to a changing environment, particularly as it relates to emerging and potentially disruptive technologies.

We are also committed to improving our outreach, accessibility, and transparency to investors, as well as to our other stakeholders, including audit committees, board members, and financial statement preparers. And because we are funded ultimately by investors through fees charged to public companies and broker-dealers, we are dedicated to becoming more efficient and effective with our resources, while empowering our people to be successful and take prudent risks to drive our mission forward.

While our strategic plan sets forth our vision for the future, our 2019 proposed budget lays the foundation for starting our journey toward that future.

Thank you to everyone who provided their advice and counsel to us, both internally and externally. Thank you to our budget and finance team and senior leaders who nimbly built our budget while our draft strategic plan continued to evolve. Thank you to my fellow board members for sharing your insights and views, and for listening to my thoughts and perspectives.

Most importantly thank you to the PCAOB staff for their unwavering commitment to protecting investors and furthering the public interest in pursuit of our mission. You inspire me every day.