Thursday, May 20, 2010

PCAOB Access to Foreign-Based Firms Appears Limited

Legal obstacles are preventing the Public Companies Accounting Oversight Board from auditing foreigh-based firms using foreigh auditors (even if the firm has a U. S. counterpart) which are listed on U. S. stock exchanges. Over 400 firms from 21 countries are affected; two leading examples are Alcatel Lucent of France (telecommunications) and British Sky Broadcasting (related to the Fox network, including Fox Business and Fox News Channels in the U. S.).

U. S. auditors of SEC clients and CFOs of companies subject to the PCAOB could be understood if they were less than thrilled that some U. S. stock exchange members did not face the same financial reporting scrutiny which they face. A reasonable solution: use something akin to the tax treaties used by IRS and foreigh tax authorities to resolve which country gets to tax specific business income.

3 Comments:

Blogger Nathan said...

Hey Dan,

Great post. I was wondering what your opinion on the PCAOB is in general? Some of the professionals I have talked to seem to think they lack the expertise to be doing any reviewing anyways (due to the restrictions where only one of oversight committee members can be a CPA). Some professionals seem to believe that when the PCAOB comes for an audit they focus on the easy accounts (cash, AR, etc) and shy away from the difficult transactions.

5:18 PM  
Blogger B120ryantScipio1 said...

This comment has been removed by a blog administrator.

10:14 PM  
Blogger James said...

Great post. I was wondering what your opinion on the PCAOB is in general?
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