The US Public Company Accounting Oversight Board last week adopted its final rules on the oversight of non-US firms, which will give it powers to inspect and discipline UK and other foreign firms that work with US-listed clients.
But some of the legal problems highlighted by firms and influential bodies still remain. These include forcing companies to provide data that may be restricted by the Data Protection Act, and a ‘double jeopardy’ system where firms could be disciplined for the same offence twice.
‘All of the legal issues we highlighted still remain a concern,’ said Neil Lerner, UK head of risk management at KPMG. ‘But the PCAOB has had its hands tied by Congress.’
The board has approved a sliding scale system of reliance, and will lean heavily on the oversight systems of individual nations where, in the PCAOB’s opinion, oversight is sufficiently independent and robust.
Some goodwill has been shown in the final rules, with the PCAOB relenting over the requirement for firms to provide the details of its home nation’s oversight system in its registration application.
The PCAOB now only requires firms to make a statement asking the board to rely on a non-US inspection.
It will then obtain the information it requires directly from the oversight body.
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