US outlines audit inspection criteria

US outlines audit inspection criteria

PCAOB chairman Mark Olson says countries would also have bilateral agreements in working towards full compliance

The US audit oversight watchdog has announced the criteria it will use in
considering which countries it can fully rely on to oversee auditors of foreign
issuers.

Speaking at an audit regulation conference in Brussels, Public Company
Accounting Oversight Board chairman, Mark Olson, said the developments were a
result of commitments by himself and European commissioner, Charlie McCreevy, to
advance collaborative efforts in 2007.

Olson proposed five principles, which include:

? the adequacy and integrity of the oversight system;

? the independence of the system’s operation from the auditing profession;

? the independence of the system’s source of funding;

? the transparency of the system; and

? the system’s historical performance.

Olson said the criteria would be applied by the PCAOB when assessing non-US
auditor oversight bodies for the purpose of determining whether the board may
place full reliance on that system in the context of inspections.

‘I understand that this is similar to how the European authorities will judge
whether the PCAOB is “equivalent” to the requirements under the Eighth
Directive,’ said Olson. ‘Like the Eighth Directive, the criteria necessarily
would combine aspects of an entity’s legal authority and how that authority is
applied.’

He said the proposed policy statement outlines a framework for moving towards
full reliance and would involve the organisation working with its counterparts
to develop bilateral arrangements.

‘I envision that these arrangements would need to address in greater detail
the progression toward full reliance,’ he said. ‘Moreover, I would anticipate
that mutual agreements would set forth other aspects of cooperative arrangements
relevant to the facts and circumstances of each jurisdiction, including those
that govern information sharing, confidentiality, and data protection.’

Further reading:

Audit oversight regulators meet in
Tokyo

EU and US unite over oversight moves

Regulators to scrap dual inspections for audit firms

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource