Washington, D.C. -- The Public Company Accounting Oversight Board said in late May that it had entered into a memorandum of understanding on enforcement cooperation with the China Securities Regulatory Commission and the Ministry of Finance, in a breakthrough on a long-running priority for the PCAOB, but one that stops short of giving it the right to conduct inspections.

The PCAOB has also been engaged in continuing discussions with the CSRC and the MOF to permit joint inspections in China of audit firms that are registered with the PCAOB and audit Chinese companies that trade on U.S. exchanges.

The agreement does not entitle the PCAOB to conduct inspections of auditing firms in China, either on its own or in tandem with Chinese regulators, which has been a long-time goal. The PCAOB also cannot access the work papers except in the case of an enforcement action against an auditing firm. Still, it represents a major breakthrough for the board.



Norwalk, Conn. -- The Financial Accounting Standards Board responded to a post-implementation review of its accounting standard for business combinations by saying that it would consider the findings of the report, along with an upcoming post-implementation review of its fair value measurement standards, and may make changes once the International Accounting Standards Board concludes its own post-implementation reviews of the corresponding International Financial Reporting Standards.

In response to the post-implementation review, FASB acknowledged the findings that some participants expressed difficulty in applying the definition of a business, accounting for purchased loans, and separately reporting some intangibles and goodwill.

FASB said it would review the findings of the forthcoming PIR on Statement 157, and will coordinate with the IASB once the review of IFRS 3 is complete, before deciding to take any action.

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