The US Public company Accounting Oversight Board (PCAOB) and the Supervisory Board of Public Accountants (RN) of Sweden have agreed to a framework for joint inspections for audit firms subject to the regulatory jurisdictions of both regulators, effective immediately.
As well as joint audits, the cooperative agreement allows for the exchange of confidential information in accordance with the provisions of the Dodd-Frank Act, which permitted the sharing of confidential information between the PCAOB and non-US counterparts.
The agreement also allows the PCAOB to share any non-public information it obtains with the Securities and Exchange Commission (SEC), while the RN may share non-public information with Sweden’s Oversight Authorities.
The PCAOB said that eight firms registered with it are located in Sweden and the terms of the agreement will be in force until 31 July 2016.
The PCAOB began its non-US inspection program in 2004, and since then it has conducted inspection in 43 non-US jurisdictions. It already signed a number of similar agreements with regulators in Europe, such as France, Germany, the Netherlands, Spain, the UK and Finland.
A set of data protection clauses were also agreed, including the fact that sensitive data will not be transferred by the RN to the PCAOB except with the consent of the data subject.
"Strict data protection laws in European countries could sometimes be problematic and provide problems on sharing information," PCAOB member Lewis Ferguson told The Accountant.
In an interview for this year’s World Survey, Ferguson who is also chairman of the International Forum of Independent Audit Regulators (IFIAR) gave his personal opinion on cross-borders regulatory issues.
Ferguson added that IFIAR is trying to create a multinational memorandum of understanding (MMoU) for its members that would provide a template for information sharing.
"A lot of countries, like the US, already have a number of bilateral agreements which take into account data protection and that therefore don’t need this MMoU. But for countries which don’t, this MMoU would provide a template or roadmap on how to share information," he said.