EU/US Reach Accord on Auditing Rules
The EU and the US have hammered out a deal to address rules for auditing on both sides of the Atlantic.
The agreement will require auditors to register in both the US and the EU to work on publicly held companies in the US and EU, with one EU official calling their efforts to compromise as "working in parallel," Eupolitix.com reported.
"It's a done deal," said William McDonough, chairman of the US Public Company Accounting Oversight Board (PCAOB) after meeting with EU’s internal market commissioner Frits Bolkestein.
He added that he was pleased by the European Commission's announcement last week that it plans to overhaul the auditing profession adopted last week.
"We are very happy to be working with the 8th company directive," he told journalists.
After many months of strife, Bolkestein said he could now accept the US requirements for EU auditors. "I think we have a deal," he said, "Fears of extra-territoriality have been entirely allayed," he added, without giving details of the concessions to be made by the US authorities.
McDonough said the PCAOB will publish its final set of rules for non-EU companies that want to audit public firms in the US, which he said will "include some elements that were omitted from the last draft."
Beginning on July 15, EU companies that want to work on publicly held US companies will have to register with the PCAOB, which will inspect the firms every three years to make sure they are meeting US standards. This was originally a point of contention for the EU Commission, which had earlier claimed that registration in the EU should have been enough for the US. Now all of the issues appear to have been ironed out, with the UK the most affected with its auditors working on about 150 US companies, Eupolitix.com reported.
"If we require registration in the US, I cannot see in the name of reciprocity why we would object to registering over here," McDonough said at an earlier conference.
Last week the European Commission proposed stricter auditing standards in the fight against the corporate scandals that are now affecting Europe, after blowing up here in 2001 and 2002.