03 March 2008

FESE response to PCAOB proposal on inspections of foreign registered public accounting firms

FESE strongly welcomes the PCAOB proposal on inspections of foreign registered public accounting firms that would give the PCAOB Board the possibility of placing full reliance on the inspections programs of qualified non-U.S. auditor oversight entities.

FESE supports a system of reciprocity to reduce unnecessary duplication of work and to provide an incentive for other countries that do not currently have appropriate systems of audit regulation to develop them.

The transitional measures that will apply to Articles 45 to 47 of the Statutory Audit Directive until 1 January 2011– covering cooperation with non-EU jurisdictions on auditor oversight – are meant to be an incentive for 3rd countries to develop a principle-based public oversight in line with the expectations of EU investors and stakeholders.

The dialogue between US and EU oversight entities is extremely welcome but the idea of sending US experts with the task to assess the European public oversight systems might undermine the objective of establishing a partnership of trust across the Atlantic.

FESE believes that full reliance should be granted to all those European Governments that have fully implemented the Statutory Audit Directive and that the system of recognition between the US and the EU should start, on a reciprocal basis and simultaneously, as of 1 January 2011.

FESE response

© FESE