The PCAOB has added an audit regulator from a prominent member of the European Union to its cooperative arrangement list.
On Friday, the PCAOB announced that it has entered an arrangement with the German Auditor Oversight Commission (AOC) to oversee audit firms subject to the regulatory jurisdictions of both regulators.
The arrangement takes effect immediately and will provide a framework for conducting joint inspections. It also contains provisions governing the exchange of confidential information between the PCAOB and the German AOC and includes an agreement on data protection.
Previously, the PCAOB entered into cooperative arrangements with regulators in two other European Union member states, the United Kingdom and the Netherlands, as well as in Switzerland and Norway and in several countries outside Europe.
PCAOB Director of International Affairs Bruce Wilson said in a statement that the German AOC has been a strong advocate for cross-border audit cooperation, and that the PCAOB is pleased to have found a solution for joint inspections that satisfies Germany’s data-protection laws.
“This agreement with the German audit regulator is a very significant step forward in our pursuit to improve audit quality and protect investors,” PCAOB Chairman James Doty said in a statement. “We are pleased with our continuing progress in overcoming obstacles to conducting inspections in European Union member states.”
More than 900 audit firms registered with the PCAOB are located outside the United States; 36 are located in Germany.
—Ken Tysiac (firstname.lastname@example.org) is a JofA senior editor.
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