Statement on Proposed 2014 Budget and Strategic Plan 

DATE: Nov. 25, 2013 

SPEAKER: James R. Doty, Chairman 

EVENT: PCAOB Open Board Meeting 

LOCATION: Washington, D.C. 

The 2014 budget and related strategic plan are the result of considerable effort and thought by board members and senior programmatic staff.

I want to express my appreciation for our Chief Administrative Officer, Darrell Pauley, our Deputy CAO, Bill Wiggins, Jim Hearn, Yoss Missaghian and Bobbie Reichert from our budget office, and our Secretary, Phoebe Brown, who worked tirelessly on refining the initiatives in our strategic plan throughout the year. I also want to thank the SEC's Deputy Chief Accountant Brian Croteau, Associate Chief Accountant Amy Steele, and CFO Ken Johnson, for their advice throughout the development of both the budget and our strategic plan.

One of the most significant elements of the PCAOB's 2014 Budget and related strategic plan is its emphasis on the use of economic analysis in the PCAOB's work. We have had economists in our Office of Research and Analysis for years. But earlier this year, we hired our first economist in the Office of the Chief Auditor.

We plan to hire additional economists to work with him, to embed economic thought and tools in the standard-setting process, from the early development of ideas and alternatives to solve problems in audit practice, through the stages of soliciting public comment and preparing a new standard. These economists will also work closely with economists in our Office of Research and Analysis, who can provide a fresh review of the economic effects of the standards.

As we have built this foundation, we have kept an eye toward the broader implications of our work and broader uses of economic thought. After several months of planning, I am pleased that we were able to announce earlier this month the formation of a new PCAOB Center for Economic Analysis, headed by the renowned University of Chicago economist Luigi Zingales.

Under Professor Zingales's expert leadership, we plan to attract other top economists to work in the Center to advise us on how economic theory, analysis, and tools can enhance the effectiveness of PCAOB programs. In addition, we hope to spur research on the role of the audit in capital formation and investor protection.

The PCAOB's 2014 Budget also reflects several key developments in the last year, including —

The 2014 Budget provides for a modest increase in staff, primarily in inspections and economics, to address these developments and support the strategic plan. Given all the work and support that has gone into the budget, I am comfortable that it is appropriate and should be submitted to the SEC for its approval.