Auditing firms will no longer be subject to dual inspections by US and European accounting regulators, according to plans under a 'roadmap' agreed on between the European Union and US Public Company Accounting and Oversight Board.
The latest announcement, from Europe's internal market and services commissioner, Charlie McCreevy, is another sign of international efforts to increase harmonisation between the two regions, the FT reported.
Companies have increasingly become hostile about overseas regulator inspections, more especially from the PCAOB, which passed a rule in 2004 allowing for reliance on overseas auditor watchdogs to perform inspections of non-US audit firms, but rarely applied the rule in the absence of oversight bodies in several European countries at the time.
At a conference in Washington, McCreevy called for both sides to 'push forward across a broader front' in their efforts.
'We want to move towards full reliance on our respective auditor public oversight systems, in the same spirit as in accounting.
'Equivalence does not require systems and standards to be identical but robust enough to ensure investor confidence,' McCreevy told the US Chamber of Commerce.
PCAOB chairman, Mark Olson, said yesterday the agreement was made easier as a result of the growing number of auditor oversight bodies.
'As more countries around the world take steps to protect the integrity of their own capital markets by strengthening auditor oversight, regulators must find ways to rely reasonably on each other in accomplishing our shared objective,' he said.
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