PCAOB Votes to Require Int'l Accounting Firm Registration

The newly formed Public Company Accounting Oversight Board (PCAOB) met yesterday and issued its first order. With a unanimous (4-0) decision, the Board voted to go forward with proposed rules that require U.S. and foreign audit firms to register with the Board if they perform audits of U.S.-listed corporations.

The PCAOB will accept public comments through March 31 on the proposed rules. After the public comment period ends, there will be another vote. The rules must be accepted by both the PCAOB and the Securities and Exchange Commission.

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."

PCAOB member Kayla Gillan endorsed the proposed registration for EU firms as a means of leveling the playing field, suggesting that the exclusion of foreign firms from the registration process could result in U.S. firms moving CPAs outside the country to avoid the required registration.

U.S. accounting firms that perform audits of public companies will be required to register and pay a non-refundable fee to cover registration costs. The amount of the fee will be determined in a PCAOB meeting next week. The registration process, which will be available online, will include a 10-part form in which firms must identify all the public companies for which they perform audits and how much has been charged for audit, accounting, and non-audit services.

In addition, the registration process will include disclosure of any disagreements with corporate audit clients as well as information about the types of quality controls in place at the audit firm. Pending lawsuits must be disclosed.

Registering audit firms must also provide a list of the names and license or certification numbers of all accountants employed by the firm who participate in or contribute to the preparation of audit reports. Foreign firms applying for registration must provide a list of all accountants participating in audits of U.S. companies.

It is expected that the registration process will be in place by late summer, 2003.

You may like these other stories...

While audits of broker-dealers showed some improvement last year compared to previous years, 71 of 90 broker-dealer audits inspected by the Public Company Accounting Oversight Board (PCAOB) in 2013 were still found to have...
The Public Company Accounting Oversight Board (PCAOB) and the Danish Business Authority (DBA) entered into a cooperative arrangement on July 18 that gives both regulators oversight of audit firms in their respective...
Staff guidance released by the Public Company Accounting Oversight Board (PCAOB) on Thursday will assist auditors of brokers and dealers registered with the US Securities and Exchange Commission (SEC) plan and perform audits...

Already a member? log in here.

Upcoming CPE Webinars

Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.
Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.