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PCAOB Meets Resistance on International Inspections

February 3, 2010

The Public Company Accounting Oversight Board sure gets around, but not as much as it would like to.

The board released an update to its list of jurisdictions outside the U.S. where it conducted inspections of registered auditing firms. The PCAOB conducted inspections in 33 jurisdictions as of the end of last year, including far-flung locales like Papua New Guinea and Kazakhstan.

The PCAOB also published a list of non-U.S. jurisdictions where it plans to conduct inspections in 2010, and an update to the list of registered non-U.S. firms that have not yet been inspected, even though more than four years have passed since the end of the calendar year in which the firms first issued an audit report while registered with the PCAOB. Those firms include a KPMG affiliate in Austria, Ernst & Young affiliates in Cyprus and the Czech Republic, Deloitte affiliates in China and Denmark, and PricewaterhouseCoopers affiliates in China, Austria, Denmark and Finland.

Some countries continue to resist the encroachment of PCAOB inspectors. The PCAOB noted that of the 27 jurisdictions where non-U.S. inspections were scheduled in 2009, inspections were conducted in only 15. “Access to information necessary to conduct inspections was, and continues to be, denied in China, Finland, France, Germany, Greece, Ireland, the Netherlands, Norway, Portugal, Sweden, Switzerland and the United Kingdom,” said the board. “The PCAOB, therefore, pulled forward the inspections of 28 other non-U.S. firms, in 12 jurisdictions, that were not originally planned for 2009.”

What’s one country’s loss is apparently another country’s gain, so to speak, though the firms being inspected probably won't be thrilled when they receive the reports taking them to task for their "deficiencies."

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