U.S. Securities and Exchange Commission (SEC) has approved the Public Company Accounting Oversight Board’s (PCAOB) Rule 6100.
Authorities indicated the action addresses a framework for the PCAOB’s determinations via the Holding Foreign Companies Accountable Act (HFCAA), noting the PCAOB is unable to inspect or investigate registered public accounting firms located in a foreign jurisdiction because of a position taken by an authority in that jurisdiction.
“This is an important step to protect U.S. investors,” SEC Chair Gary Gensler said. “I believe it is critical that the Commission and the PCAOB work together to ensure that the auditors of foreign companies accessing U.S. capital markets play by the same rules. The Commission adopted interim final rules to implement its required rulemaking under the HFCAA earlier this year. We remain on track to finalize those rules before the end of the year.”
The SEC said the amended Sarbanes-Oxley Act of 2002 mandates the PCAOB inspect domestic registered public accounting firms, as well as those entities in foreign jurisdictions, and investigate potential statutory, rule, and professional standards violations committed by registered public accounting firms and associates.
“The PCAOB’s inspection regime has unquestionably led to improved audit quality,” SEC Acting Chief Accountant Paul Munter said. “With this rule, we can continue the process of ensuring that all publicly traded issuers in our capital markets are complying with the same requirements and that investors can draw the same level of confidence from the quality of the audits of all issuers no matter where their registered public accounting firm is located.”