US audit watchdog tells staff to reveal crimes

Link: PCAOB resists European opposition

Employees, including many with no involvement at all in audit work, have been told by their bosses to reveal details of any convictions from, or pending, criminal or disciplinary proceedings.

KPMG, Deloitte and Ernst & Young said they were among those currently gathering the information as part of the compliance procedures of the PCAOB.

The move prompted worries that staff could be forced to ‘out’ skeletons in their closets for the US audit watchdog’s benefit.

Under PCAOB rules, staff do not have to reveal crimes related ‘solely to the operation of a motor vehicle’. But those at manager level or above would have to give details of other crimes, such as drugs offences.

The PCAOB does not require submissions from staff whose duties are only ‘clerical’. But senior staff not involved in audit, including marketing professionals, have expressed surprise after being told to fill in forms.

The PCAOB has said it expects all ‘associated persons’ to comply with the reporting requirement and wants thousands of staff to be included at larger firms. It insisted only those involved in audits needed to submit the information.

Initial plans requiring staff to hand-sign their submissions were dropped amid fears of a huge administrative burden.

In addition to the obligations to register with the PCAOB, the largest firms will face fees of up to $390,000 (£212,000) for the privilege of doing so.

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