Public Companies that are Audit Clients of PCAOB-Registered Firms from Non-U.S. Jurisdictions where the PCAOB is Denied Access to Conduct Inspections
The PCAOB updates this list periodically based on information disclosed on Form AP and filed with the PCAOB each time a registered public accounting firm issues an audit report for a public company. It was last updated for Forms AP filed with the PCAOB before October 1, 2020.
In order for their securities to be traded in U.S. capital markets, public companies, whether located in the United States or abroad, must comply with certain U.S. legal requirements, including the requirement to periodically file audited financial statements with the U.S. Securities and Exchange Commission. As required by the Sarbanes-Oxley Act of 2002, the auditor of those financial statements – whether a U.S. auditor or a non-U.S. auditor – must be registered with, and therefore subject to the jurisdiction of, the Public Company Accounting Oversight Board. This includes undergoing regular PCAOB inspections to assess the auditor’s compliance with U.S. law and professional standards in connection with its audits of public companies.
PCAOB inspections may result in the identification of deficiencies in one or more of an audit firm’s audits of public companies and/or in its quality control procedures which, in turn, can result in an audit firm carrying out additional procedures that should have been performed already at the time of the audit. Those procedures have sometimes led to the audited public company having to revise and refile its financial statements or its assessment of the effectiveness of its internal controls over financial reporting. In addition, through the quality control remediation portion of the inspection process, inspected firms identify and implement practices and procedures to improve future audit quality.
List of Public Companies Affected by Obstacles to PCAOB Inspections
Positions taken by Chinese authorities impede our ability to oversee PCAOB-registered audit firms in mainland China and Hong Kong. Specifically, these positions currently impair our ability to conduct inspections of the audits of public companies with China-based operations. In addition, the PCAOB currently faces obstacles to inspect PCAOB-registered firms in two European Union member states; however, we expect to conclude soon bilateral cooperative arrangements that will permit the PCAOB to commence inspections in Belgium and resume inspections in France. As a result of these obstacles, investors or potential investors in U.S. capital markets who rely on the audit reports of PCAOB-registered firms in these four jurisdictions are deprived of the potential benefits of PCAOB inspections of these auditors.
For the information of those investors and potential investors, the PCAOB is publishing a list identifying the public companies for which a PCAOB-registered public accounting firm signed and issued an audit report and is located in a jurisdiction where obstacles to PCAOB inspections exist. This list is derived from information filed with the PCAOB on Form AP when a PCAOB-registered firm issues an audit report for a public company. The list includes those public companies whose audited financial statements identified in the audit report have a fiscal year period ending in 2019 and 2020, respectively, and the PCAOB-registered firm filed the Form AP with the PCAOB before October 1, 2020. A firm must submit a Form AP each time a firm issues an audit report for a public company to report the name of the engagement partner and other accounting firms participating on the audit. Investors can search PCAOB online databases for Forms AP on AuditorSearch. Each year, a registered firm also must provide basic information about the firm’s audit practice during the reporting period, including audit reports issued and a list of audits of public companies the firm played a substantial role, which is submitted to the PCAOB on Form 2 and available on the PCAOB firm filing database.
The list is limited to public companies for which auditors from the jurisdictions in question reported on Form AP having issued audit reports.** At the same time, it should also be recognized that there may be auditors from those jurisdictions, including auditors identified in the list, that perform referred work, including playing a substantial role, in the audits of numerous multinational public companies not listed here. Even though these auditors do not issue audit reports for such multinational public companies, the audit work they perform is relied upon by the public company’s principal auditor, in the U.S. or elsewhere. That work can be significant to the audit of the financial statements the multi-national public company files with the SEC and would also be within the scope of PCAOB inspections. You can view the list of firms that rely on such referred work performed by firms located in mainland China and Hong Kong.
**Some public companies appear in the list more than once, showing more than one auditor. In some cases, this is because the firm had different auditors in different years. In other cases, it is because the public company had a joint audit, with respect to which more than one auditor reported having issued an audit report. In addition, some companies that appear in the list may have ceased to be public companies since the time of the audit report cited in the relevant firm's filing. Finally, some auditors shown on the list have been inspected at least once by the PCAOB. In the case of some firms in Hong Kong, the PCAOB inspections did not involve, or no obstacles were raised to, review of audit work relating to a company’s operations in mainland China. In the case of firms in France, the PCAOB conducted inspections prior to the December 2019 expiration of the PCAOB’s cooperative agreement with the French audit regulator.
 The position taken by authorities in mainland China may in some circumstances cause a registered firm located in another jurisdiction to attempt to resist PCAOB inspection of public company audit work that the firm has performed relating to the company’s operations in mainland China. Only in mainland China and Hong Kong, however, is the position of the Chinese authorities effectively an obstacle to inspection of all, or nearly all, registered firms in the jurisdiction.
 The PCAOB’s cooperative arrangement with the French audit authority expired in December 2019, preventing inspections of registered firms in France until a new arrangement is concluded.