The Public Company Accounting Oversight Board has revised its budget for 2005, reducing its projected expenditures by some $15.4 million by reducing its hiring projections, reducing travel and consulting fees, and delaying implementation of information technology projects.
The Board had approved a budget in October assuming $152.5 million in revenue; however, nine weeks later the PCAOB said it was hiring new staff members more slowly than projected, and would begin 2005 with a lower headcount than expected.
Only a few weeks before issuing the revised budget, hints emerged from the Securities and Exchange Commission that the PCAOB budget would not be approved. An SEC spokesman would only say that the SEC was working closely with the PCAOB on its budget, though the PCAOB said the SEC review process had no bearing on its revisions.
In the new budget, PCAOB says it has reduced its salary expense by $12.2 million from its original plans, reduced its travel allowance by about $1 million, reduced consulting and professional fees by $1.3 million, and cut its IT spending by $1 million because of delays in projected start dates of certain IT projects.
House Oversight For FASB Switches To Financial Services Committee
With little fanfare or explanation, House Speaker J. Dennis Hastert opened the 109th session of Congress with an announcement that the House Financial Services Committee will hold sole oversight for the Financial Accounting Standards Board.
Hastert
The announcement ends an agreement struck in 2001 in which the Financial Services Committee shared oversight for FASB with the House Energy and Commerce Committee. According to the reports, Hastert said the two committees "shall no longer provide jurisdictional guidance" for FASB.
Members of the Financial Services Committee, chaired by Rep. Michael G. Oxley (R-Ohio) of Sarbanes-Oxley fame, led the charge in Congress last year to block FASB’s controversial new rule requiring the expensing of stock options.
Oversight gives the Committee the authority to monitor FASB’s activities, but not approve or overrule its setting of accounting standards. Opponents of stock option expensing have promised to continue their appeal for Congressional intervention.
IAASB, AICPA Issue New Standards For Audit Documentation
U.S. and international trade groups representing accountants are issuing new guidance on how auditors should document and report the results of their audits.
The American Institute of Certified Public Accountants, via its Auditing Standards Board, has published for comment its draft of a new Statement on Auditing Standards titled Audit Documentation, to replace its existing SAS of the same name. The new audit standards are intended to answer concerns about uniformity in the preparation, filing and retention of audit documentation.
In addition, The International Auditing and Assurance Standards Board of the International Federal of Accountants recently issued ISA 700, The Independent Auditor’s Report on a Complete Set of General Purpose Financial Statements, to guide auditors in issuing a two-part report for every audit. The first part deals with financial statements and should be essentially the same for all audits conducted in accordance with International Standards on Auditing. The second part would address issues that may be required by local regulators, depending on jurisdiction.
Kellas
The IAASB issued the new standards at the request of the European Commission to help harmonize audit reporting within the European Union. “Many EU and other countries require the auditor to report on matters additional to the financial statements but these requirements differ between countries,” said IAASB Chairman John Kellas. “Our solution is to require a two-part report.”
The complete documents are available in the box above; right.
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