Section 106 of the Sarbanes-Oxley Act provides that non-U.S. auditors of issuers are subject to the Act and the PCAOB rules in the same manner and to the same extent as are U.S. auditors. In developing PCAOB programs, however, the Board recognized that certain aspects of its programs raised special issues for Non-U.S. auditors, sometimes due to country and local laws.
In light of special issues raised by aspects of the PCAOB mission and programs, the Board developed a "sliding scale" approach to cooperating with non-U.S. regulators, particularly affecting the scheduling of PCAOB inspections. PCAOB Rule 4012 permits the Board to rely, to a degree deemed appropriate, on the inspections conducted by oversight regulators in other jurisdictions. The degree of reliance is based on the sliding scale -- the more independent and rigorous a local oversight body, the greater the Board's reliance on its inspections. Pursuant to PCAOB Rule 4011, a foreign firm may submit a request to the PCAOB that it consider such reliance on a non-U.S. government inspection authority.
Below are links to some key documents.