Joint audit inspections hang in the balance as US wavers

US reluctance to push ahead with talks about information sharing could derail moves to carry out reciprocal audit firm inspections with the UK, according to a senior regulator.

Paul George, director of the UK’s Public Oversight Board, which is overseen by the Financial Reporting Council, said: ‘Without adequacy discussions it is difficult, if not impossible, in the long-term for the UK to facilitate joint inspections.’

George’s reaction comes in response to EU commissioner Charlie McCreevy’s decision to suspend work on reciprocal audit firm inspections with non-EU countries because there is ‘no guarantee the US will do the same’.

McCreevy said: ‘I think that we need more time to ensure that the United States, in particular, is ready to cooperate with us fully, based upon mutual trust and mutual assistance.

‘That is why I urge the SEC and the PCAOB to agree the draft policy statement of December 2007 on how to deal with overseas oversight bodies and resolve any further outstanding issues.’