The recent amendment to Public Company
Accounting Oversight Board (PCAOB) registration rules could mean
audit firms are unfairly chosen due to their status, according to
Grant Thornton International global head of assurance, Ken
Sharp.

“The profession will probably see situations
where clients and companies make there own assumptions about what
these rules mean and how they are going to be applied and on the
surface their first reaction may be to say ‘are you registered with
the PCAOB’ and if you are they’ll hire you and if you are not they
wont,” Sharp told the International Accounting
Bulletin
.

Sharp’s comments come as the PCAOB announced
this month it is amending its registration process of non-US audit
firms. According to the amendment, if a US inspection is not
allowed, the PCAOB will issue a notice of hearing and then consider
whether approval of the application would be consistent with its
responsibility under the Sarbanes-Oxley Act.

The regulator confirmed it will continue to
allow applications to remain as ‘pending’ while the go-ahead for an
inspection is ascertained.

Sharp said he hopes the new rules will be
applied consistently and all firms treated alike, regardless of
whether they are currently registered or not.

He also says that while the profession
supports independent regulation, mutual reliance between countries
would ease the burden of being inspected by two different
authorities who could ultimately hand down completely different
outcomes.

“We don’t mind being reviewed once,” Sharp
says. “But we would rather not be reviewed 25-30 times, otherwise
we spend more time being reviewed than doing the audits to start
with.”

Sharp says he is certain firms will not
violate local laws to overcome regulatory demands but insists
conflicts between lawmakers and regulators must be resolved to
ensure there is no pressure on firms to bend the rules.

 

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