Washington, DC, July 18, 2014
The Public Company Accounting Oversight Board today announced that it has entered into a cooperative arrangement with the Danish Business Authority (DBA) for the oversight of audit firms subject to the regulatory jurisdictions of both regulators. The agreement takes effect immediately.
"This is another step forward in our pursuit of robust international cooperation to help improve audit quality and protect investors," said PCAOB Chairman James R. Doty. "We look forward to working closely with our Danish counterparts and believe it will be to our mutual benefit."
The agreement with the DBA provides a framework for joint inspections and allows for the exchange of confidential information in accordance with the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Those provisions amended the Sarbanes-Oxley Act of 2002 to permit the PCAOB to share confidential information with its non-U.S. counterparts under certain circumstances. An agreement on data protection is also part of this cooperative arrangement.
"Our ongoing efforts to reach cooperative agreements with European Union member state regulators continue," said Bruce Wilson, PCAOB Director of International Affairs. "We are pleased that we have found a way to move forward with a framework for joint inspections with the DBA."
Within the EU, the PCAOB has reached similar agreements with Sweden, Finland, France, Germany, the Netherlands, Spain, and the United Kingdom. Additionally, the PCAOB has agreements in Switzerland and Norway, and with several regulators in North America, the Middle East, Asia, and Australia.
Since the inception of its non-U.S. inspection program in 2004, the PCAOB has conducted inspections in 44 non-U.S. jurisdictions. Where possible, the Board seeks to coordinate its inspections with the local authorities to enhance cooperation and the sharing of information.
Under the Sarbanes-Oxley Act, the PCAOB oversees and inspects all accounting firms that regularly audit public companies whose securities trade in U.S. markets. The Act requires the Board to conduct inspections annually for firms that regularly provide audit reports for more than 100 issuers, and at least triennially for firms that regularly provide audit reports for 100 or fewer issuers.
More than 900 of the approximately 2,300 audit firms currently registered with the PCAOB are located outside of the United States, including five registered firms in Denmark.