The PCAOB proposed a rule Thursday that would provide a framework for the board to follow when its oversight activities are thwarted by overseas authorities.
The proposal is intended to implement regulations that were made law in the Holding Foreign Companies Accountable Act, P.L. 116-222.
“Cooperation between the PCAOB and our international counterparts is vital to facilitating meaningful audit oversight and to strengthening investor protection,” PCAOB Chairman William Duhnke said. “This rule will enable the PCAOB to fulfill its responsibilities under the Holding Foreign Companies Accountable Act.”
When the PCAOB is unable to inspect or thoroughly investigate registered public accounting firms located in a foreign jurisdiction because of a position taken by authorities there, the proposed rule would establish:
- The manner of the board’s determinations;
- The factors the board will evaluate and the documents and information it will consider when assessing whether a determination is warranted;
- The form, public availability, effective date, and duration of such determinations; and
- The process by which the board can modify or vacate its determinations.
Public comments on the proposal can be provided through July 12 at firstname.lastname@example.org.
— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.