Should the PCAOB budget be set and managed by the board and staff operations?

The correct choice indicates that the PCAOB (Public Company Accounting Oversight Board) budget should indeed be set and managed by both the board and staff operations. The PCAOB is responsible for overseeing the audits of public companies to protect investors and ensure the preparation of informative, accurate, and independent audit reports. To effectively fulfill these responsibilities, the board, in collaboration with the staff, must have control over financial resources and budget-setting processes.

Establishing budgets that align with the strategic goals of the organization allows for appropriate allocation of resources toward regulatory activities, inspections, standard-setting, and outreach. This collaborative approach ensures that the budget reflects the operational needs and strategic vision of the PCAOB. The involvement of both the board and the staff enables a comprehensive perspective, fostering accountability and enhancing the organization's ability to respond to the evolving landscape of financial oversight.

Opportunities for external input or oversight, such as from auditors, may exist but are not prerequisites for the PCAOB's budgeting process, which is fundamentally an internal governance matter. Therefore, the emphasis should be on the collaborative governance structure within the PCAOB itself for budget management.