The Public Company Accounting Oversight Board has voted to extend the deadlines for inspections of non-U.S. accounting firms to avoid conflicts with the laws in other countries.
The PCAOB voted to adopt an amendment to Rule 4003 and to issue for public comment separate proposed amendment to that rule. Both amendments relate to the timing of certain inspections of registered non-U.S. firms. The board also invited public comment on possible courses of action to address circumstances in which the board might be unable to complete an inspection because a firm is concerned that doing so may violate local law.
"Today's action reflects both an affirmation of the board's willingness to work cooperatively to address concerns of authorities in other countries and a practical approach to the need to conduct statutorily required inspections of registered firms without unreasonable delay," said PCAOB Chairman Mark W. Olson (pictured) in a statement.
The board conducts inspections of registered firms pursuant to Sarbanes-Oxley requirements, but SOX permits the board to adjust the frequency requirements. The PCAOB has been trying to address issues that arise in attempting to inspect non-U.S. firms, such as potential non-U.S. legal restrictions and other concerns of local authorities. The PCAOB has conducted 123 inspections of non-U.S. firms in 24 jurisdictions.
The board adopted Rule 4003(f), which, in effect, extends to 2009 the deadline for the PCAOB's first inspection of 21 of the 52 non-U.S. firms for which the first inspection deadline had been 2008. The board has conducted or will conduct the other 31 of those inspections in 2008. Rule 4003(f) will not take effect unless approved by the Securities and Exchange Commission.
The board has also proposed for public comment Rule 4003(g), which would extend the current 2009 deadline for the first inspection of 50 non-U.S. firms located in 24 jurisdictions where the PCAOB has not previously conducted inspections. Under the proposal, the PCAOB would conduct those inspections over the period from 2009 to 2012 according to a schedule based on criteria described in the release. The proposed rule would not extend the deadline for other non-U.S. inspections currently required by 2009.
In some cases, the board noted, non-U.S. firms might decline to provide the information requested in a PCAOB inspection because of a concern that doing so could violate local law. In those cases, the board may decide to impose disciplinary sanctions on a firm for failing to cooperate with an inspection.
The public comment period on proposed Rule 4003(g) and other issues discussed in the release extends through Feb. 2, 2009. For more information, visit www.pcaobus.org.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access