What Regulators Can Learn from the PCAOB’s Budget Cut

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In a move that caught global attention, the U.S. Public Company Accounting Oversight Board (PCAOB) has approved a 9% cut to its 2026 budget, reducing it from $399.7 million to $362.1 million. While most regulatory bodies are expanding their budgets, this shift signals a growing emphasis on doing more with less.

For South Africa’s Independent Regulatory Board for Auditors (IRBA), the PCAOB’s decision offers valuable lessons, especially as local regulators face rising pressure to be more effective, more transparent, and more financially responsible.

Leaner Doesn’t Mean Weaker

According to the PCAOB’s acting chair George Botic, the goal is not to weaken oversight, but to improve efficiency. The board plans to cut back on consulting fees, reduce travel costs (mostly related to inspections), and even lower salaries, by 52% for the chair and 42% for other board members. A planned headcount reduction of 47 employees will bring the total staff complement down to 817.

The message? Cost-cutting doesn’t have to compromise credibility or capability.

A Wake-Up Call for South Africa

South African regulators, including IRBA and the Johannesburg Stock Exchange (JSE), are navigating similar challenges: growing expectations for audit quality, limited resources, and heightened public scrutiny following years of corporate failures.

But while funding constraints are real, the PCAOB example shows that credibility can be preserved, even strengthened, through visible efforts to operate more efficiently. It’s about leadership by example. In tough times, credibility is built not just by enforcing standards, but by applying them internally.

Why This Matters to Accountants

For accountants in practice, the takeaway is simple: clients want value, not bureaucracy. Just like regulators, firms must streamline, automate where possible, and offer high-impact services that justify their fees. Cutting excess doesn't mean cutting quality.

For accountants in commerce, the move highlights a shift in corporate governance thinking. Boards and CFOs are becoming more sensitive to audit costs and regulatory effectiveness. If you can explain these trends in a boardroom and offer cost-conscious, compliance-smart strategies, you’re no longer just the numbers person, you’re the trusted advisor.

Go For Smarter Rather Than Bigger Budget

The PCAOB’s reduction comes after a period of rapid growth in its budget, from 2022 to 2025, its costs jumped by 40%. Board member Christina Ho, who voted to approve the budget despite calling it too conservative, argued that the watchdog should go further in trimming fat and reassessing priorities. Her critique echoes sentiments we’ve heard in South Africa: that governance needs reform, not inflation.

This is where CIBA’s position is clear: lean, accountable governance matters. Regulators must demonstrate they’re delivering value. Auditors must be positioned not just as compliance checkers, but as drivers of economic growth and public trust.

The Bottom Line

South Africa’s regulators don’t need bigger budgets, they need smarter ones. Efficiency, transparency, and impact must come first.

As CIBA continues to advocate for right-sized regulation and meaningful reform, we call on policymakers, audit professionals, and business leaders to ask: Are we delivering results, or just adding red tape?

Source Article: Accounting Today