In addition to inspecting registered public accounting firms located in the United States, the PCAOB also inspects registered public accounting firms located in foreign jurisdictions in order to assess those firms’ compliance with the Sarbanes-Oxley Act, the rules of the Board, the rules of the Securities and Exchange Commission, and professional standards in connection with their performance of audits, issuance of audit reports, and related matters involving U.S. public companies, other issuers, brokers and dealers. Under the Act and the Board’s rules, non-U.S. registered firms are subject to PCAOB inspections in the same manner as U.S. registered firms.
The PCAOB has inspected non-U.S. registered firms since 2005. These inspections have generally been carried out in two ways: (i) PCAOB-only inspections, where the PCAOB conducts the inspection on its own in coordination with the home country regulator; and (ii) inspections conducted jointly with the home country regulator. Under a cooperative framework for non-U.S. inspections that was adopted by the Board, the PCAOB may rely, to a degree deemed appropriate by the Board, on inspection work performed by the home country regulator.
The PCAOB often enters into formal cooperative arrangements with foreign audit regulators in order to minimize administrative burdens and potential legal or other conflicts that non-U.S. firms may face in the foreign jurisdiction in question. Unfortunately, because of the position taken by certain non-U.S. authorities, the PCAOB continues to be denied access to conducting inspections in certain non-U.S. jurisdictions, although it continues to seek access to those jurisdictions.
Below is information regarding the PCAOB’s inspections of non-U.S. registered firms. Additional information on PCAOB inspections may be found by referring to the Inspections link located to the right under Related Information.