PracticeAuditEurope blocks one-way traffic regulation by US

Europe blocks one-way traffic regulation by US

EU contributors put a fierce defence against US regulators

Peter Wyman, global head of regulatory affairs at PricewaterhouseCoopers

‘Real risk’: Peter Wyman

If regulators thought that shaping a system of overseas inspections and
regulation was going to be easy, they won’t think so now.

European contributors to a US round table on regulatory oversight have put up
a fierce defence against US regulators.

Pierre Delsaux, a director in internal markets at the EC, has told his US
counterparts that they cannot simply inspect audits of European companies
without offering the same freedoms to EU regulators working with US businesses.

He threatened using European legislation to block US access if there is no
reciprocation.

‘Accessing audit working papers will be extremely complicated… because we
have legislation preventing exchanges of these documents… if we don’t have some
kind of agreement, many practical obstacles will exist,’ he warned.

Delsaux’s comments appeared to have shocked US investors.

But they’re not unexpected, considering that the
Public Company Accounting
Oversight Board
has not committed itself to reciprocal sharing of audit
working papers with its foreign counterpart oversight bodies – despite expecting
this of others.

Taken aback was the Consumer Federation of America’s director of investor
protection, Barbara Roper.

‘In many cases [the barriers have] been erected since
Sarbanes-Oxley, in
what appears to be an attempt either to ignore the PCAOB’s obligations to
Sarbanes-Oxley under US law, or to make it impossible for it to comply with US
law.

‘When Sarbanes-Oxley was debated, these issues were on the table. It [US
Congress] has discussed these issues and rejected this [full reliance] approach
because they said it would create an unacceptable investor protection loophole.’

The meeting has left many baffled. But Peter Wyman, global head of regulatory
affairs at
PricewaterhouseCoopers,
captured the current state of things best: ‘There’s a very real risk now that
all the world will inspect all the rest of the world… a multiple duplication
of effort and ultimately at a great deal of cost for no useful purpose
whatsoever.’

Related Articles

KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1w Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

2w Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

3w Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

3w Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

2m Alia Shoaib, Reporter
Deloitte to pay $149.5m over Taylor, Bean & Whitaker audit failure

Audit Deloitte to pay $149.5m over Taylor, Bean & Whitaker audit failure

2m Alia Shoaib, Reporter
Carillion inquiry: missed red flags, aggressive accounting and the pension deficit

Audit Carillion inquiry: missed red flags, aggressive accounting and the pension deficit

2m Alia Shoaib, Reporter
Deloitte’s audits of Hezbollah-linked bank to be examined by Dubai court

Audit Deloitte’s audits of Hezbollah-linked bank to be examined by Dubai court

2m Alia Shoaib, Reporter