The Public Company Accounting Oversight Board has entered into a cooperative agreement with the Supervisory Board of Public Accountants of Sweden on the oversight of audit firms in both regulators’ jurisdictions.
The pact takes effect immediately. The agreement with the Swedish RN 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 allow the PCAOB to share confidential information with its counterparts in other countries under certain circumstances. An agreement on data protection is also part of the cooperative arrangement that was announced Monday.
“The agreement with the Swedish RN confirms our shared commitment to strengthen the oversight of global audits and investor protection through cross-border cooperation,” said PCAOB chairman James R. Doty in a statement. “The PCAOB is highly focused on reaching cooperative arrangements with its counterparts in the remaining jurisdictions in the European Union and other parts of the world where the board currently is prevented from conducting inspections.”
The PCAOB has reached similar agreements with other countries in the European Union, including Finland, France, Germany, the Netherlands, Spain and the United Kingdom. In addition, the PCAOB has agreements with Switzerland and Norway, and with several regulators in North America, the Middle East, Asia and Australia.
“We value our cooperative relationship with the Swedish RN and are looking forward to working closely with them to improve audit quality,” said PCAOB director of international affairs Bruce Wilson.
Since the inception of its non-U.S. inspection program in 2004, the PCAOB has conducted inspections in 43 non-U.S. jurisdictions. Whenever possible, the board tries to coordinate its inspections with the local authorities to provide better cooperation and information sharing.
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. The Act requires the board to conduct inspections annually for firms that regularly provide audit reports for more than 100 issuers, and at least triennially for firms that regularly provide audit reports for 100 or fewer issuers.
More than 900 of the approximately 2,300 audit firms currently registered with the PCAOB are located outside the U.S. Eight registered firms are located in Sweden, including affiliates of all four Big Four firms, along with BDO Sweden and Grant Thornton Sweden.