POB officials embark on an ‘exotic’ firm-finding mission

Officials at the UK’s Public Oversight Board are busy packing their buckets
and spades for travels to exotic destinations.

In what could prove to be the best recruiting sergeant for the regulatory
profession, accounting watchdogs from around the world are preparing to come to
the UK to inspect audit firms, just as the UK plans to go elsewhere.

The British Virgin Islands, Oman, Barbados, Egypt and Puerto Rico are just a
few of the sunny climes on UK’s audit watchdog list ­ currently.

The FRC has been tasked with ensuring the regulatory regime for overseeing
accountancy firms from these countries is sufficiently robust.

The globetrotting work is thanks to the EC’s directive over statutory audits
of overseas companies from outside the EU but listed in the UK.

The POB maintains its trips will be kept to a minimum. ‘What we strongly
believe is that the regulation should be conducted under the home country
principle,’ says Paul George, POB chairman.

The body’s opposite number in the US is taking a more hands-on approach.
‘They have a sliding scale for reliance and have set out criteria for a
regulator to meet. Their indicators are more prescriptive than we think is
appropriate,’ says George.

The POB is ‘pleased’ the EC has offered a transition period for 33 countries,
which either have, or are planning, well-developed independent audit regulation.
So, travels to the US, Canada, Japan, New Zealand or Singapore, where the
regulators embrace similar principles to the UK, are unlikely.

While still needing to register in the UK, audit firms from qualifying
jurisdictions will not be subject to the UK’s systems of inspection and
oversight. Although they will come under UK rules if they haven’t delivered by
the end of the transition period.

Then there are the 18 countries that are yet to embark on the journey of
regulatory independence. No doubt their fledgling regulators will need careful
guidance, nurturing and face-to-face advice. But will it be a case of some
countries receiving more help than others?

Slipping off to one of the Caribbean Islands sounds a more tempting
proposition than ducking bullets in the Lebanon or Georgia.

Your comments please ­ on the back of a postcard ­ to the FRC by the end of
next month.

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