Welcome to the July 2009 edition of the
Sarbanes Oxley Compliance Professionals Association (SOXCPA)
newsletter
Breaking News
Mutual recognition: The Public
Company Accounting Oversight Board (PCAOB) votes to
rely on the European Union's system of
public oversight for statutory auditors and audit firms within
each Member State, the Canadian Public Accountability Board, the
Australian Securities and Investments Commission, the Japanese
Certified Public Accountants and Auditing Oversight Board, South
Korea's Financial Supervisory Service, and Singapore's Accounting
and Corporate Regulatory Authority.
There are difficulties and potential conflicts of law.
In some jurisdictions, the PCAOB's ability to conduct inspections,
either by itself or jointly with a local regulator, is complicated
by the concerns of local authorities about potential legal
obstacles and sovereignty issues.
The Board seeks to work with the home-country authorities to try
to resolve these and any other concerns.
The effort involved in attempting to resolve
potential conflicts of law, or to evaluate a non-U.S. system in
response to a Rule 4011 request, can be substantial.
A list of the non-U.S. jurisdictions in which there are firms that
the Board intends to inspect in 2009 is available at:
www.pcaobus.org/Inspections/Other/2009/List_of_Jurisdictions_2009.pdf
The Board also maintains on its web site a list of those
jurisdictions in which there are registered firms that the Board
has inspected: www.pcaobus.org/Inspections/Other/2009/Inspections_Non_US.pdf
PCAOB Release No. 2009-003, June 25, 2009
FINAL RULE CONCERNING THE TIMING OF CERTAIN INSPECTIONS OF NON-U.S.
FIRMS, AND OTHER ISSUES RELATING TO INSPECTIONS OF NON-U.S. FIRMS
After public comment, the Public Company Accounting Oversight
Board (PCAOB) has adopted an amendment
to the inspection frequency requirements of Rule 4003 that will
give the Board the ability to postpone, for up to three years, the
first inspection of any foreign registered public accounting firms
that the Board is otherwise required to conduct before the end of
2009 and that is in a jurisdiction where the Board has not
conducted an inspection before 2009.
The Board also has announced that it will
implement certain transparency measures related to the PCAOB's
international inspections program.
The amendment to Rule 4003 will take effect upon approval by the
Securities and Exchange Commission (Commission).
Introduction
On December 4, 2008, the Board proposed, and sought public comment
on, an amendment to Rule 4003 that would give the Board the
ability to postpone, for up to three years, certain inspections of
foreign registered public accounting firms that the Board is
otherwise required to conduct before the end of 2009.
The Board is now adopting proposed Rule 4003(g) as final without
changes.
Background
Under the Sarbanes-Oxley Act of 2002 (the Act) and PCAOB Rules, it
is unlawful for any public accounting firm to prepare or issue an
audit report with respect to any issuer or play a substantial role
in the preparation or furnishing of any such audit report without
being registered with the PCAOB.
For non-U.S. firms, this registration requirement took effect on
July 19, 2004.
The Act directs the Board to conduct a continuing program of
inspections to assess registered public accounting firms'
compliance with certain requirements.
With respect to each registered firm that regularly provides audit
reports for 100 or fewer issuers, the Act requires the Board to
conduct an inspection at least once every three years.
The Act authorizes the Board to adjust that inspection frequency
requirement by rule if the Board finds that a different inspection
schedule is consistent with the purposes of the Act, the public
interest, and the protection of investors.
Inspection frequency requirements adopted by the Board are set out
in PCAOB Rule 4003, "Frequency of
Inspections.
Under Rule 4003, when a firm issues an audit report while
registered,the Board must conduct an inspection of that firm
within a certain number of calendar years following the year of
the audit report.
The Board began a regular cycle of inspections of U.S. firms in
2004 and has conducted 982 such inspections, including annual
inspections of the largest firms and two or more inspections of
many other firms.
Inspections of non-U.S. firms began in 2005, and the Board has
inspected 140 non-U.S. firms located in 26 jurisdictions.
[The Board has inspected non-U.S. firms
located in Argentina, Australia, Bermuda, Brazil, Canada, Chile,
Colombia, Greece, Hong Kong, India, Indonesia, Ireland, Israel,
Japan, Kazakhstan, Mexico, New Zealand, Norway, Panama, Peru, the
Russian Federation, Singapore, South Africa, South Korea,
Chinese-Taipei, and the United Kingdom.]
Under Rule 4003's current inspection frequency requirements, there
are 129 additional non-U.S. firms in 42 jurisdictions that, by
virtue of their having issued audit reports, the Board is
currently required to inspect but has not yet inspected.
Those 129 pending "first inspections" of non-U.S. firms (with
deadlines ranging from 2009 to 2012 under the existing rule) are
in addition to other pending inspections of non-U.S. firms that
the Board has already inspected at least once.
The rule amendment that the Board is adopting will affect a
portion of those pending first inspections.
Specifically, the amendment to Rule 4003 will give the Board the
ability to postpone, for up to three years, first inspections that
the Board is currently required to conduct before the end of 2009
in jurisdictions where the Board has conducted no inspections
before 2009.
The amendment does not affect inspection frequency requirements
concerning any other first inspections or concerning any second,
or later, inspections of a firm.
II.
Inspections of Non-U.S. Firms
The PCAOB has recognized since the outset of its inspection
program that inspections of non-U.S. firms pose special issues.
In its oversight of non-U.S. firms, the Board seeks, to the extent
reasonably possible, to coordinate and cooperate with local
authorities.
Since 2003, when the PCAOB began operations, a number of
jurisdictions have developed their own auditor oversight
authorities with inspection responsibilities or enhanced existing
oversight systems.
[In 2006, for instance, the European Union
enacted a directive requiring the creation of an effective system
of public oversight for statutory auditors and audit firms within
each Member State.
See The Directive 2006/43/EC of the European Parliament and the
Council (May 17, 2006) (the "Eighth Directive").
In addition, among others, Canada created the Canadian Public
Accountability Board, and in Australia, the responsibilities of
the Australian Securities and Investments Commission were expanded
to include auditor oversight.
In Asia, Japan established the Certified Public Accountants and
Auditing Oversight Board, South Korea delegated responsibility for
auditor oversight to its Financial Supervisory Service, and
Singapore established the Accounting and Corporate Regulatory
Authority.]
The Board believes that it is in the interests of the public and
investors for the Board to develop efficient and effective
cooperative arrangements with its non-U.S. counterparts.
In jurisdictions that have their own inspection programs, this may
include conducting joint inspections of firms that are subject to
both regulators' authority.
Indeed, the Board has a specific framework for working
cooperatively with its non-U.S. counterparts to conduct joint
inspections and, to the extent deemed appropriate by the Board in
any particular case, relying on inspection work performed by that
counterpart.
PCAOB Rule 4011 permits non-U.S. firms that
are subject to Board inspection to formally request that the
Board, in conducting its inspection, rely on a non-U.S. inspection
to the extent deemed appropriate by the Board.
If a Rule 4011 request is made, Rule 4012 provides that the Board
will, at an appropriate time before each inspection of the firm,
determine the degree, if any, to which the Board may rely on the
non-U.S. inspection.
Rule 4012 describes aspects of the non-U.S. system that the Board
will evaluate in making that determination.
Even where the Board does not work with a local regulator to
conduct joint inspections, the Board communicates with its
counterpart or other local authorities (such as securities
regulators or other government agencies and ministries) regarding
its inspections to be conducted in the jurisdiction.
In some jurisdictions, the PCAOB's ability to conduct inspections,
either by itself or jointly with a local regulator, is complicated
by the concerns of local authorities about potential legal
obstacles and sovereignty issues.
The Board seeks to work with the home-country authorities to try
to resolve these and any other concerns.
The effort involved in attempting to resolve potential conflicts
of law, or to evaluate a non-U.S. system in response to a Rule
4011 request, can be substantial.
The effort typically involves negotiating
the principles of an arrangement for cooperation consistent with
the inspection obligations that the Act imposes on the Board.
It also involves the Board gaining a detailed understanding of the
other jurisdiction's auditor oversight system in order for the
Board to determine the degree of reliance it is willing to place
on inspection work performed under that system in a particular
inspection year.
Additional effort is involved in coordinating the scheduling of
specific inspections.
Where possible, the Board seeks to conduct inspections jointly
with local authorities both to take advantage of potential
efficiencies and to avoid imposing unnecessary regulatory burdens
on firms.
Like the PCAOB, several of these other
authorities proceed according to inspection frequency
requirements.
While some of the Board's counterparts are established and have
inspection programs, many have only recently begun inspections or
are still building up their inspections resources.
As a result, synchronizing the inspections schedules of these
authorities and the PCAOB's requirements is sometimes difficult.
Notwithstanding these challenges, the Board has so far conducted
140 non-U.S. inspections.
Moreover, 61 of those inspections, in six jurisdictions, have been
conducted jointly with other auditor oversight authorities, while
inspections in 20 jurisdictions have been conducted solely by the
PCAOB.
[Joint inspections have been conducted in Australia, Canada, South
Korea Norway, Singapore and the United Kingdom.]
III.
Extension of the Deadline for Some 2009 Inspections
Under existing Rule 4003, there are currently
68 non-U.S. firms that, by virtue of when
they first issued audit reports after registering with the PCAOB,
the Board is required to inspect for the first time by the end of
2009.
Those firms are located in 36 jurisdictions, including several
jurisdictions in which the Board has already conducted first
inspections of other firms.
Of those firms, 49 are located in 24 jurisdictions where the Board
has not conducted any inspections to date.
Most of those 24 jurisdictions have or soon will have a local
auditor oversight authority with which the Board would seek to
work toward cooperative arrangements before conducting
inspections.
Because of the steps involved in concluding such arrangements and
to evaluate the local system (described above), the Board has
concerns about proceeding as if that work can be completed for all
of the jurisdictions in which the PCAOB has not previously
conducted inspections in time to conduct the required inspections
by the end of 2009.
Accordingly, the Board is adopting a new paragraph (g) to Rule
4003 to allow the Board to postpone, for up
to three years, the first inspection of any non-U.S. firm that the
Board is currently required to conduct by the end of 2009 and that
is in a jurisdiction where the Board has not conducted an
inspection before 2009.
In determining the schedule for completion of the inspections
subject to new paragraph (g), the Board will implement its
proposal to sequence these 49 inspections such that certain
minimum thresholds will be satisfied in each of the years from
2009 to 2012.
The minimum thresholds relate to U.S. market capitalization of
firms' issuer audit clients.
The Board will begin by ranking the 49 firms according to the
total U.S. market capitalization of a firm's foreign private
issuer audit clients.
Working from the top of the list (highest U.S. market
capitalization total) down, the 49 firms will be distributed over
2009 to 2012 such that, at a minimum, the following criteria are
satisfied:
· by the end of 2009, the Board will inspect
firms whose combined issuer audit clients' U.S. market
capitalization constitutes at least 35 percent of the aggregate
U.S. market capitalization of the audit clients of all 49 firms;
· by the end of 2010, the Board will inspect firms whose combined
issuer audit clients' U.S. market capitalization constitutes at
least 90 percent of that aggregate;
· by the end of 2011, the Board will inspect firms whose combined
issuer audit clients' U.S. market capitalization constitutes at
least 99.9 percent of that aggregate; and
· the Board will inspect the remaining firms in 2012.
In addition to meeting those market capitalization thresholds, the
Board also will satisfy certain criteria concerning the number of
those 49 firms that will be inspected in each year.
Specifically, the Board will conduct at least four of the 49
inspections in 2009, at least 11 more in 2010, and at least 14
more in 2011.
[The issuer audit client U.S. market
capitalization currently associated with a significant number of
the 49 firms is relatively low, and even zero in a number of cases
where firms appear to have stopped issuing audit reports for
issuers.
As a result, approximately 92% of the relevant issuer market
capitalization is associated with 15 of the 49 firms.]
It is important to note that the distribution described above will
not operate to prevent an inspection from occurring earlier than
called for by the schedule.
Any inspection may be moved to an earlier year for a variety of
reasons, such as the presence of risk factors (including risk
factors relating to referred work that the firm performs on audits
for which it is not the principal auditor), synchronization of
schedules with a local regulator for purposes of a joint
inspection, or simply the opportunity and the availability of
resources to do an inspection earlier (including availability of
inspectors with specialized industry knowledge and relevant
language skills).
In addition, the Board will at least annually review updated
market capitalization data and consider whether there have been
any changes that warrant moving a particular inspection forward to
an earlier year.
Conversely, the Board does not intend to
make changes that would move an inspection of one of these 49
firms to a later year than in the initial distribution except as
the result of a development relating to the market capitalization
of the firm's issuer clients.
Specifically, if a firm's issuer audit client market
capitalization drops significantly and the firm performs no
significant amount of referred work on audits, its inspection
might be delayed to a later year.
In any event, the Board will not, for any reason, move one of
these 49 inspections to a later year than in the initial
distribution without publicly describing the change and the reason
for it.
In response to the Board's request for
comment on the proposed extension of the 2009 inspection
deadline, several commenters suggested that the Board exercise its
authority under Section 106 of the
Act to exempt firms that cannot cooperate with PCAOB inspections
due to legal conflicts or sovereignty-based opposition from their
local governments.
The Board believes that it is not in the interests of investors or
the public to exempt non-U.S. firms from the Act's inspection
requirement given that the Board has previously determined not to
exempt non-U.S. firms from the Act's registration requirements and
given that an inspection is the Board's primary tool of oversight.
The Board also received several comment letters addressing the
length of the proposed extension for certain firms with 2009
deadlines.
Some comment letters expressed concern about the inspection delay
of up to three years but ultimately expressed qualified support
for the Board's decision.
These comments urged the Board to permit no further delays and to
proceed as described above by sequencing the inspection of firms
subject to the extension based on certain thresholds relating to
the U.S. market capitalization of firms' issuer audit clients.
These comments also supported the Board's suggestion that the
Board announce at the beginning of each calendar year until 2012
all of the non-U.S. jurisdictions in which there are firms whose
inspection the Board will conduct in that year.
Some comments also suggested that the Board should utilize the
additional time provided by the proposed extension to enhance its
international inspections program, particularly in the areas of
risk assessment and preinspection planning.
Other comment letters supported the Board's decision to extend the
inspection deadlines, but some qualified their support by noting
that three years may not be enough time to overcome the legal
conflicts and sovereignty concerns in all relevant jurisdictions.
Several comments expressed support for the Board's plan to
sequence the deferred inspections in time based on the U.S. market
capitalization of the firms' clients, but some also noted that
this plan did not adequately take into account the varying degree
of legal conflicts present in the different jurisdictions and
might have the effect of requiring early on during the three year
period the inspection of firms in jurisdictions with legal
obstacles that cannot be overcome quickly.
As explained above, the Board believes that
an extension of up to three years for the relevant firms is the
appropriate course.
Distributing the affected firms across three
years strikes the proper balance between avoiding unnecessary
delays in the inspection of registered firms and allowing
reasonable time for the Board to continue its efforts to reach
cooperative arrangements with the relevant home-country
regulators.
The Board believes that any longer or further extension would not
be in the interests of investors orthe public.
In the Board's view, this adjustment to the inspection frequency
requirement is consistent with the purposes of the Act, the public
interest, and the protection of investors.
The Board believes that its approach to implementing Rules 4011
and 4012, developing cooperative arrangements, and conducting
joint inspections with foreign regulators is enhancing the Board's
efforts to carry out its inspection responsibilities.
There is long-term value in accepting a limited delay in
inspections to continue working toward cooperative arrangements
where it appears reasonably possible to reach them.
As suggested by some comments, the Board also believes that the
additional time to conduct certain inspections will have the added
benefit of giving the Board more time to continue to enhance its
inspection program, particularly in the areas of risk assessment
and pre-inspection planning, and the Board intends to do so.
The Board recognizes that some non-U.S.
firms may be reluctant to comply with PCAOB inspection demands
because of a concern that doing so might violate local law or the
sovereignty of their home country.
The Board believes that the purposes of the Act, the public
interest, and the protection of investors are better served, up to
a point, by delaying some of the first inspections to work toward
a cooperative resolution than by precipitating legal disputes
involving conflicts between U.S. and non-U.S. law that could arise
if the Board sought to enforce compliance with its preferred
schedule without regard for the concerns of non-U.S. authorities.
The Board does not intend, however, to make any further
adjustments to the inspection frequency requirements applicable to
firms whose first inspection was due no later than 2009.
While the Board will continue to work toward cooperation and
coordination with authorities in the relevant jurisdictions, the
Board will make inspection demands on the firms early enough in
the year in which they are scheduled for inspection according to
the above described sequencing to allow the Board to conduct the
inspections during that year.
IV.
Transparency Concerning International Inspections Program
In order to provide additional transparency with regard to the
Board's international inspections program, the Board has
implemented its proposal to announce publicly, near the beginning
of each year until 2012, all of the non-U.S. jurisdictions in
which there are firms whose inspections the Board will conduct in
that year (including, but not limited to, jurisdictions relevant
to the 49 inspections discussed above).
Once such announcement is made, the Board will not remove a
jurisdiction from the list unless the Board publicly explains why
the schedule has changed with respect to that jurisdiction.
[A list of the non-U.S. jurisdictions in which there are firms
that the Board intends to inspect in 2009 is available at:
http://www.pcaobus.org/Inspections/Other/2009/List_of_Jurisdictions_2009.pdf.
The Board also maintains on its web site a list of those
jurisdictions in which there are registered firms that the Board
has inspected: http://www.pcaobus.org/Inspections/Other/2009/Inspections_Non_US.pdf]
In addition, because the Board recognizes that investors have an
interest in the identity of firms that have not been inspected
within the timeframe that investors could reasonably have expected
an inspection to occur, the Board intends to implement its
proposal to maintain on its web site an up-to-date list of all
registered firms that have not yet had their first Board
inspection even though more than four years have passed since the
end of the calendar year in which they first issued an audit
report while registered with the Board.
Inclusion on the list is not an indication that a firm has not
cooperated with the Board or is at fault in any way, nor is the
list intended as a substitute for action the Board might take in
the event that a firm fails to cooperate in an inspection.
The list is intended only to provide
transparency to the public with regard to delayed inspections.
The Board received a number of comments addressing transparency
issues.
Several comment letters support the Board's proposal to maintain a
list of firms that have not yet been inspected as described above.
Two comments suggested that the Board should provide regular (e.g.
biannual) updates on the progress it has made in inspecting the 49
firms subject to the extension.
Several comment letters asserted that along with listing the firms
that have not been inspected, the Board should explain the reason
for the failure to conduct the inspection.
Other commenters expressed opposition to the Board's proposed list
of firms.
Concerns include the possibility that the
list would unfairly raise questions about the firms' quality of
work even though no inspection has taken place, potentially
through no fault of the firm.
Some comment letters also suggested that the list could cause a
loss of investor confidence in the listed firms' clients or in
other audit firms in jurisdictions with firms on the list.
Several commenters urged that the proposed list should be
accompanied by language explaining that inclusion on the list does
not constitute a reflection of the firms' quality of work, and/or
that the list should explain the reason for each firm's inclusion
on the list.
Several alternatives to the list of firms proposed by the Board
were suggested by the comment letters, including
(1) listing only the jurisdictions where inspections have not been
conducted rather than listing individual firms
(2) listing firms that have been inspected in lieu of firms that
have not,
(3) creating a comprehensive list of all firms subject to
inspection with three categories - firms that have been inspected
and a report has been issued, firms that have been inspected but
where no report has been issued yet, and firms that have not been
inspected.
As explained above, the Board believes that
the expectation created by the Act and the Board's rules as to the
frequency of inspections should be addressed through transparency
about the Board's progress.
However, the Board agrees with those commenters who suggested that
a list of uninspected firms could falsely suggest that the listed
firms are being uncooperative without any reason or that the
quality of their work is poor.
The Board therefore intends to preface the list with language
clarifying that inclusion on the list is not intended to create
any positive or negative inferences about the quality of the
firm's audit work, its systems, policies, procedures, practices or
conduct, or about the strength of its home-country oversight
system.
The Board does not believe that it would be appropriate to provide
an explanation for each firm's inclusion on the list.
The Board may not be in a position to know all of the reasons for
a firm's position with respect to an inspection demand by the
Board.
In addition, given the possibility of disciplinary proceedings to
determine whether a particular firm's conduct violates the Act or
PCAOB rules, it would be inappropriate for the Board to comment
publicly on the firm's position with respect to an inspection
demand.
The Board will include in the prefatory language to the list a
statement that inclusion on the list should not be construed as
supporting any positive or negative inferences about the reason(s)
for inclusion on the list.
Further, the Board does not believe that the alternative
suggestions to the proposed list of uninspected firms - such as
listing jurisdictions where inspections have not taken place or
listing firms where inspections have been conducted - are
sufficiently transparent.
In some jurisdictions, some firms may have
been inspected within the relevant four-year time period while
other firms were not.
Listing the relevant jurisdiction therefore would misrepresent the
inspection status of those firms that were inspected.
In addition, the Board does not believe that listing firms that
have been inspected, rather than those that have not, would
provide the necessary transparency about the fact that other firms
were not inspected during the normal timeframe required by the Act
and Board rules, as some firms registered with the PCAOB are not
currently required to be regularly inspected under the Board's
rules.
Finally, the Board agrees with the comments suggesting that the
Board should provide biannual updates about the progress it has
made in inspecting the 49 firms subject to the amendment to Rule
4003(g).
Thus, the Board will announce biannually its progress toward the
thresholds described above with respect to the number of firms to
be inspected each year and the aggregate market capitalization of
firm clients.
An additional measure of transparency of the Board's progress in
international inspections in general is provided by the Board
maintaining a list on its web site of those jurisdictions in which
there are registered firms that the Board has already inspected,
as noted in footnote 24 above.
V. Registered Firms' Obligations
As described above, the Board intends to continue its efforts to
develop cooperative relationships with its foreign counterparts.
However, in light of its statutory obligation, as the Board
explained above and in the Proposing Release, it will need to make
inspection demands on non-U.S. firms even in circumstances where
the sovereignty concerns or legal objections of local authorities
have not been overcome.
The Board recognizes that, in those circumstances, some non-U.S.
firms may be reluctant to comply with PCAOB inspection demands.
The Board cannot, however, let the prospect of such refusals
dictate delays in the Board's efforts to conduct inspections.
As explained in the Proposing Release, firms must register with
the Board in order to engage in certain professional activity
directly related to, and affecting, U.S. financial markets, and
all registered firms are subject to the Act and the rules of the
Board irrespective of their location.
A registered firm is subject to various requirements and
conditions, including PCAOB Rule 4006's requirement to cooperate
in an inspection.
In addition, as reflected in Section 102(b)(3) of the Act, a
firm's compliance with Board requests for information is a
condition of the continuing effectiveness of the firm's
registration with the Board.
The Board noted in the Proposing Release that a registered firm's
failure or refusal to provide requested information is a violation
of Rule 4006 and that the Board does not view non-U.S. legal
restrictions or the sovereignty concerns of local authorities as a
sufficient defense in a Board disciplinary proceeding instituted
under Section 105(c) of the Act for failing or refusing to provide
information requested in an inspection.
The Proposing Release explained that when a violation of Rule 4006
is established through a disciplinary proceeding in accordance
with the Act and the Board's rules, the Board may impose
disciplinary sanctions.
The Board noted that there is a range of
disciplinary and remedial sanctions available to the Board,
including revocation of a firm's registration.
While the Board's consideration of any
actual non cooperation case will be based on the facts of the
case, the Board must take into account the importance of the
inspection process to the oversight regime established by the Act.
Moreover, the Board must be sensitive to the legislative premise
reflected in Section 102(b)(3) - that firms that cannot or will
not cooperate with Board requests for information should not be
registered.
That being said, at the same time, the Board recognizes that a
refusal to provide information based on non-U.S. legal
restrictions or the sovereignty concerns of local authorities
implicates considerations not present in other noncooperation
circumstances.
To assist the Board in its consideration of these issues, the
Board invited the public to comment on whether and how a non-U.S.
legal restriction or refusal to cooperate due to a sovereignty
concern should be factored into the Board's consideration of the
appropriate sanction to impose for a violation of Rule 4006.
A number of comment letters urged the Board
to adopt meaningful sanctions, including revoking a firm's
registration, for non-compliance with Board inspection demands,
even if the non-compliance is due to legal conflicts faced by the
non-U.S. firm.
These comments stated that investors have an interest in the
inspections of audit firms who audit, or play a substantial role
in the audits of, U.S. issuers and that investors would not
benefit from the imposition of weaker sanctions on firms that do
not cooperate with PCAOB inspection demands.
Several comments stated that weak sanctions in this situation
would create an incentive for firms to refuse to cooperate with
the PCAOB and could lead to regulatory arbitrage, frustrating the
Board's efforts to improve the quality of financial reporting in
the U.S.
These comments asked the Board to make a clear statement that
sanctions will be pursued for non-compliance with inspections.
Conversely, a number of other commenters expressed concerns about
the Board sanctioning firms whose refusals to cooperate with Board
inspection demands are based on legal conflicts in the firms'
respective home jurisdictions.
These comments argued that sanctions in that situation would be
unfair to the firms who have no control over local legal obstacles
and who would be forced to choose between violating the Act
and violating their home-country law.
On the other hand, several comments stated that this fairness
argument inappropriately elevates the concerns of firms over those
of investors, who have a right to expect that those firms that
play a significant role in the audits of U.S. public companies are
subject to oversight on the same terms and to the same degree as
U.S. firms.
Several comment letters also expressed concern that the imposition
by the PCAOB of sanctions in this situation will harm the
relationship of the PCAOB with the non-U.S. jurisdictions whose
laws give rise to the conflict.
Other comments suggested that the sanctions would impact not only
audit firms but also U.S. issuers or their subsidiaries, because,
according to the commenters, the sanctions referenced by the Board
in the Proposing Release (restricting firms from accepting new
clients or revoking firm registrations) would have to be imposed
on all firms in a jurisdiction with a conflicting law and would
leave available no registered firm to perform the necessary audit
work, particularly in jurisdictions where the law requires that
local firms perform the relevant audit work.
The Board appreciates the comments submitted on this point.
As previously stated, the Board believes
that most, if not all, legal conflicts relating to inspections can
be resolved through cooperative arrangements, consents, or
redaction of certain types of information that is otherwise not
relevant to the inspection.
Should a conflict prove to be unsolvable, however, the Board does
not believe it would protect the interests of investors or further
the public interest for the Board to decline as a matter of
general policy to impose any sanctions on firms that do not
cooperate with the Board's inspection demands because of legal
conflicts or sovereignty concerns.
Doing so would be tantamount to exempting those firms from the
inspection requirement.
The Board ultimately will weigh each case on its facts and will
consider the comments further if and when the issue arises in a
particular case.
On the 25th day of June, in the year 2009, the foregoing was, in
accordance with the bylaws of the Public Company Accounting
Oversight Board, ADOPTED BY THE BOARD.
THE SARBANES OXLEY JOB MARKET
Case study: Sarbanes-Oxley skills in IT jobs
advertised across the UK
PERMANENT JOBS
The demand for Sarbanes-Oxley skills in IT jobs advertised across
the UK. Included is a guide to the average salaries offered in IT
jobs that have cited Sarbanes-Oxley over the 3 months to 13 July
2009 with a comparison to the same period last year.
90% of jobs offered a salary of more than £30,000
10% of jobs offered a salary of more than £67,500
CONTRACTS
The demand for Sarbanes-Oxley skills in IT contracts advertised
across the UK.
Included is a guide to the average contractor rates offered in IT
contracts that have cited Sarbanes-Oxley over the 3 months to 13
July 2009 with a comparison to the same period last year.
90% of contracts offered a daily rate of
more than £225
10% of contracts offered a daily rate of more than £548
Average daily rate - £335
To find more:
www.itjobswatch.co.uk/jobs/uk/sarbanes-oxley.do
Dear member,
Write in your CV, resume, websites etc. that
you are member of the Sarbanes Oxley Compliance Professionals
Association.
Take advantage
of the distance learning and online certification program of
our Association - at a cost that is unheard of.
www.sarbanes-oxley-association.com/Distance_Learning_and_Certification.htm
Best
Regards,
George Lekatis
President of the Sarbanes Oxley
Compliance Professionals Association
General Manager, Compliance
LLC
1200 G Street NW Suite 800, Washington DC 20005, USA
Tel: (202) 449-9750
Email: lekatis@sarbanes-oxley-association.com
Web:
www.sarbanes-oxley-association.com
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