Statement on Proposed 2016 Budget and 2015-2019 Strategic Plan

Date Nov. 24, 2015
Speaker Lewis H. Ferguson, Board Member
Event PCAOB Open Board Meeting
Location Washington

I support this proposed strategic plan and budget for 2016. I am pleased that the budget holds the level of resources budgeted relatively steady as compared to our 2015 budget. I also believe that this level of resources will enable us to continue to support our major programs and ongoing initiatives as well as to make significant progress on a number of our strategic initiatives and near term priorities. Overall, I believe this strategic plan and budget will enable us to continue to carry out our mission to improve audit quality and further investor protection.

While I am happy with the final product, I note that the process of arriving here has been challenging. I am hopeful that in future years, with improvements to the budget timetable and the timeliness of consultation, some of the work that the budget office, divisions and the Board contributes to this effort can be front-loaded and streamlined. I have also proposed that we change the way we present the narratives that discuss and justify our budget numbers to the Securities and Exchange Commission. Emphasizing more clearly changes from prior years' budgets and major new strategic initiatives will facilitate review and help us highlight the resources that are critical to support our needs. Currently, we devote significant narrative content to long-standing activities, many required by our enabling statute, that will be sustained at existing levels. This does not help a reviewer of our budget to focus on the aspects of the budget that justify the new things we want to do in the coming budget year.

Additionally, I hope we can move to a model where the Board discusses our strategic plan earlier in the year, and the strategic plan, which should be the primary driver of the budget, is finalized prior to the creation of the budget. I'd note that our near term priorities were developed in 2012 as part of our strategic planning at that time. As we have made good progress on those priorities, perhaps a look at the strategic plan in future years will include development of a new set of near term priorities early in the year and we can then incorporate those into the future budgets. Finally, I hope we can continue to strive to foster inter-divisional cooperation and harmonize aspects of the budget that impact more than a single division as we encourage all the divisions of the PCAOB to work together towards our common mission. It is important that each division see the narrative discussion of work being undertaken by other divisions so that we can identify synergies and maximize the efficiency of our resource use.

I extend my sincere thanks to the budget team. All of you have worked tirelessly on tight timelines and at times in challenging circumstances, but always with good cheer, to ensure that we met our budget deadlines. For that I am very grateful. I also want to express my appreciation for the constructive and thoughtful contributions that the Securities and Exchange Commission's staff has made again this year to the formulation of this budget.