PCAOB steps up foreign inspections

More UK audit firms can expect to be targeted by the US Public Company
Accounting Oversight Board this year, after the body said it would step up
inspections of foreign firms in 2006.

Last year, the PCAOB carried out inspections of 16 foreign firms, including
that of BDO Stoy Hayward. The Big Four and other firms in the UK are expected to
receive visits over the course of 2006 following talks with the Financial
Reporting Council last month, the Financial Times reports.

Although many firms are concerned over the extraterritorial powers that the
PCAOB has over their firm and the risk of ‘double jeopardy’ punishment from the
body and a national regulator, BDO’s managing partner Jeremy Newman actively
encouraged the inspections, which were carried out jointly with the FRC’s audit
inspection unit.

‘We let the PCAOB come in because we wanted to show that our audit procedures
are as robust and strong as anyone else’s and we are as capable as anyone else
of auditing companies with US listings,’ he said.

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