Europe faces off against US over audit inspections

A row between Europe and the US over audit inspections looms after the EC
suspended its work on co-operation with non-EU audit oversight bodies over fears
that the US is not ready to make the same leap.

Internal market commissioner Charlie McCreevy said last week that discussions
with the EU’s 27 member states had been halted as more time was needed to ensure
that the US was ready to rely on the work of oversight bodies in other
countries, according to the
Financial Times.

‘While some of our trading partners, notably Canada and Japan seem to be open
towards such an agenda, the same is not true for the US,’ said McCreevy.

‘As things stand at the moment, the EU will commit itself to facilitate US
inspections but we currently have no guarantee that the US will do the same for
us, This is not good for the confidence of our investors here in the EU – nor
does it send the right signal for the EU’s own oversight bodies which we here in
the EU have worked hard to put in place.’

European accounting firms have lobbied for a system of mutual reliance
between international audit oversight bodies since the inception of the US
Public Company Accountancy Oversight Board. Its inspections, it was claimed,
duplicated the work of native oversight boards and ran the risk of ‘double
jeopardy’, with firms potentially being hauled over the coals twice for the same
transgression by different bodies.