The Public Company Accounting Oversight Board today announced a cooperative agreement with the German Auditor Oversight Body (AOB), effective immediately.
The agreement announced today allows for cooperation between the PCAOB and the AOB in the oversight of audit firms subject to the regulatory jurisdictions of both regulators.
In 2012, the PCAOB entered into a cooperative agreement with the predecessor to the AOB, the German Auditor Oversight Commission; this cooperative agreement was extended in 2013. In June 2016, the Auditor Oversight Commission was replaced by the AOB as the independent audit regulator in Germany.
"We are pleased to continue our cooperative relationship with Germany, a very important PCAOB partner in Europe," said PCAOB Chairman James R. Doty. "Investor protection across borders is strengthened by the issuance of the recent Adequacy Decision by the European Commission, and the continued collaboration among the PCAOB and its European counterparts in the oversight of global audits."
The agreement with the AOB provides a framework for joint inspections and allows for the exchange of confidential information in accordance with applicable German law and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 in the United States. An agreement on data protection also is part of the cooperative arrangement with Germany. These agreements are consistent with the prior agreements between the PCAOB and the German Auditor Oversight Commission.
"The PCAOB is looking forward to further building upon the strong cooperative relationship it has developed with its German counterparts over the years," said Bruce Wilson, PCAOB Director of International Affairs.
Under the Sarbanes-Oxley Act, the PCAOB is required to oversee and inspect all accounting firms that regularly audit public companies whose securities trade in U.S. markets. More than 900 audit firms currently registered with the PCAOB are located outside of the United States in 86 jurisdictions. Currently, 39 registered firms are located in Germany.