The Public Company Accounting Oversight Board has signed a cooperative agreement with Finland’s audit regulator, allowing officials from the U.S. and Finland to conduct joint inspections of auditing firms and share information about them.
The agreement was announced Monday, shortly after the announcement of a similar deal with France (see PCAOB Strikes Inspection Deal with French Auditing Firm Regulator). In the Finnish deal, the PCAOB entered into an agreement with the Auditing Board of the Central Chamber of Commerce of Finland, also known as AB3C, relating to the oversight of audit firms subject to the regulatory jurisdictions of both regulators. The agreement takes effect immediately.
"This agreement with Finland is the Board's sixth with a European Union member state regulator and marks our continued progress in cross-border audit regulatory cooperation," said PCAOB chairman James R. Doty in a statement. “We look forward to working closely with our Finnish counterparts. We can be significantly more effective together."
The PCAOB has concluded similar agreements within the European Union with the United Kingdom, Germany, the Netherlands, Spain and, most recently, France. In addition, the PCAOB has agreements in Switzerland and Norway, along with several non-European regulators in North America, the Middle East, Asia and Australia.
The PCAOB said it continues to pursue additional agreements with audit oversight authorities in other EU member states and jurisdictions around the world. However, the PCAOB has still not struck a deal yet with China, which is one of its biggest priorities.
The agreement with the Finnish audit regulator 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 the cooperative arrangement with Finland.
"The AB3C and the PCAOB both are committed to investor protection and to having a strong working relationship with each other," said PCAOB director of international affairs Bruce Wilson.
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. More than 900 audit firms currently registered with the PCAOB are located outside of the United States, spanning 87 jurisdictions. Currently, five registered firms are located in Finland, including affiliates of BDO, Deloitte & Touche, Ernst & Young, KPMG and PricewaterhouseCoopers.