U.S. accounting watchdog slashes budget

/ Source: The Associated Press

The U.S. accounting watchdog has voted to cut its 2005 budget by more than 10 percent, to $136.1 million, mainly because of difficulties in hiring workers.

The Public Company Accounting Oversight Board also said it may consider raising salaries in order to attract workers as competition for experienced auditors intensifies.

Thursday's budget cut comes just two months after the board approved a $152.8 million budget for 2005 amid expectations that it would start the year with 300 employees. Instead, the audit-oversight board will begin the new year with 262 staffers, reducing the chances of meeting projections for 450 employees by the end of 2005.

The nonprofit board was created by Congress 2 1/2 years ago in the aftermath of a series of corporate accounting scandals. It has been seeking to add to its work force as it picks up its routine inspections. The board plans to conduct annual inspections of firms that audit more than 100 public companies, and to inspect the smaller accounting firms at least once every three years.

The oversight board is funded through fees levied on auditing firms and public companies.

The audit-oversight board said that, even with less money and fewer workers than projected, it will be able to meet the requirements of the Sarbanes-Oxley Act on corporate reform.