US, EU Close to Agreement on PCAOB Registration
U.S. and European Union regulators are nearing agreement over the once-controversial matter of European companies registering with the Public Company Accounting Oversight Board (PCAOB).
As part of the Sarbanes-Oxley Act, all domestic and foreign firms auditing publicly held firms in the U.S. must register with the PCAOB. Domestic firms have until October 22, 2003. EU firms have until April of 2004.
Last year, European Union Commissioner of Internal Markets Frits Bolkestein objected to the suggestion that EU firms need to register with the PCAOB, indicating that their own controls are sufficient and a required U.S. registration would subject EU audit firms to "a double regulatory regime which would be excessive, inefficient and disproportionate."
Now the two sides are nearing compromise. PCAOB Chairman William McDonough said on Tuesday that a final agreement was imminent that would require EU firms to "joint register" with their local regulators and the PCAOB—and idea McDonough proposed last month.
What’s left to decide is how much information firms will have to offer when registering. The compromise will require EU legislative changes, so that the EU registration requirements match those of the PCAOB. EU legislation can take up to 18 months and would most likely not occur before the April 2004 PCAOB registration deadline.