The Public Company Accounting Oversight Board today announced that it has entered into a cooperative arrangement with the Accounting and Auditing Institute (Instituto de Contabilidad y Auditoría de Cuentas) of Spain relating to the oversight of audit firms subject to the regulatory jurisdictions of both regulators.
The agreement takes effect immediately and allows joint inspections to commence this year.
"This critical agreement with Spain is a reflection of our continuing efforts to reach cooperative agreements with European Union member state regulators," said PCAOB Chairman James R. Doty. "We look forward to working closely with our Spanish counterparts and believe it will be to our mutual benefit."
The PCAOB has cooperative arrangements with regulators in three other European Union member states — the United Kingdom, the Netherlands, and Germany — as well as in Switzerland and Norway. Cooperative arrangements also have been reached with several non-European regulators in North America, the Middle East, Asia, and Australia. The PCAOB continues to negotiate with regulators in numerous other European and non-European countries.
In addition to providing a framework for conducting joint inspections, the arrangement with the Spanish regulator provides for the exchange of confidential information between the ICAC and the PCAOB, consistent with certain provisions of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. Those provisions amended the Sarbanes-Oxley Act of 2002 to permit the PCAOB to share confidential information with its non-U.S. counterpart regulators under certain circumstances. The cooperative arrangement with Spain also includes an agreement on data protection.
"The Spanish ICAC is a leader in bilateral and multinational efforts to improve effective cross-border supervision of auditors and audit quality," said Bruce Wilson, PCAOB Director of International Affairs. "We are pleased to work closely with them for the benefit of investors."
The Sarbanes-Oxley Act directed the PCAOB to oversee and periodically inspect all accounting firms that regularly audit companies whose securities trade in U.S. markets. More than 900 audit firms currently registered with the PCAOB are located outside the United States, spanning 88 jurisdictions. There are 16 registered firms located in Spain.