The Public Company Accounting Oversight Board has struck an agreement with Italy’s audit oversight regulator, Commissione Nazionale per le Società e la Borsa.
The agreement allows the U.S. and Italian audit regulators to conduct joint inspections and oversee auditing firms subject to the jurisdiction of both regulators.
“We are pleased to begin working with the Italian audit regulator and look forward to an effective partnership," said PCAOB Chairman James R. Doty in a statement. "Cross-border collaboration between the PCAOB and European audit regulators is essential to global investor protection."
The PCAOB already has inspection agreements in 13 European countries whose registered auditing firms the PCAOB needs to inspect. However, negotiations are still underway with several other regulators in Europe.
Under the Sarbanes-Oxley Act, the PCAOB is required to oversee and inspect every accounting firm that regularly audits public companies whose securities are traded on U.S. markets. Around 900 audit firms currently registered with the PCAOB are located outside the U.S. in 89 jurisdictions. Fourteen registered firms are now located in Italy.
The cooperative agreement with Italy’s audit regulator offers a framework for joint inspections and permits the two regulators to exchange confidential information in accordance with Italian laws and the Sarbanes-Oxley Act. The pact also includes an agreement on data protection.