PCAOB adopts rules for oversight of non-US firms
10 Jun 2004
The US Public Company Accounting Oversight Board (PCAOB) has adopted rules relating to oversight of non-US public accounting firms that audit companies registered with the US SEC.
- Press Release (PDF 26k)
- Full Text of Rules (PDF 120k)
The Board's rules on inspections (PCAOB Rules 4011 and 4012) provide a foreign registered public accounting firm an opportunity to minimize the unnecessarily duplicative administrative burdens of dual oversight by requesting that the Board rely – to an extent deemed appropriate by the Board – on inspections of the registered firm under the home country's oversight system. Under the Board's rules, a firm would first provide the Board with a one-time statement asking the Board to rely on a non-US inspection. At an appropriate time before each inspection of a non-US firm that has submitted such a statement, the Board would determine the appropriate degree of reliance based on information about the non-U.S. system obtained primarily from the non-US regulator regarding the independence and rigor of the non-US system. The Board would also base its decision on its discussions with the appropriate entity or entities within the oversight system concerning the specific inspection work program for the non-US firm's inspection at hand. The more independent and rigorous a home country's system, the higher the Board's reliance on that system. A higher level of reliance translates into less direct involvement by the Board in the inspection of the non- US registered public accounting firm. |