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April 28, 2009

Olson defends US co-operation

Foreign audit watchdogs have greater access to US audit information than the Public Company Accounting Oversight Board (PCAOB) does in other jurisdictions, the US watchdog has claimed.

PCAOB chairman Mark Olson said that on the balance the PCAOB is more restricted than foreign counterparts when investigating the activities of firms that audit entities listed within its jurisdiction.

However, speaking to The Accountant for the US survey (see Seeking opportunity in risky times), Olson said Sarbanes-Oxley regulation prevents the PCAOB from sharing some information – a restriction he would like removed – and that complete reliance between national regulators was a work in progress.

Olson was responding to the EC’s decision earlier this year to put on hold plans to co-operate with Japanese, Canadian and US audit oversight bodies until it perceives the US is showing more trust in its European counterparts.

He said building co-operative relationships involves challenges arising from legal issues that vary between jurisdictions.

“In some jurisdictions, we are told the law significantly limits the information a firm registered with the PCAOB can provide to the PCAOB, even though US law does not impose any comparable restrictions on a foreign regulator’s ability to obtain audit work papers and related materials from a US firm,” he said.

Feeling positive

Olson said the board is making progress in building co-operative relationships.

“We understand some of those regulators would like to see us move quickly to something like complete reliance on their work, and we continue to carefully consider issues related to that question.

“In the meantime, we are doing all we can to build relationships and find ways to effectively carry out the auditor oversight that Sarbanes-Oxley mandates for the benefit of investors,” he said.

“I think those efforts, and the efforts of our non-US regulatory counterparts, are moving us all in the right direction, if sometimes a bit more slowly than we might hope.”

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