Mario Christodoulou, Accountancy Age, Wednesday 19 May 2010 at 09:40:00

US audit regulator publishes list of companies it is being blocked frominspecting


US authorities are being blocked from inspecting the audits of more than 60UK-based multinational companies, amid fears American investors are being put atrisk.

The US audit regulator, the Public Company Accounting Oversight Board(PCAOB), set up in the wake of the Enron scandal, inspects the auditors of USregistered companies. The board, however, has been blocked from inspectingoverseas auditors, which have US registrants as their clients, owing to adispute over information sharing.

The European Union (EU) will not allow regulators to help the PCAOB unless,in return, it aids EU regulators in their inspections of US-based auditors of EUregistered companies.

Today,the PCAOB raised the stakes publishing a list of more than 400 companies whoseaudits it has been unable to inspect.

The UK contained one of the largest proportions of companies, second only toChina and Hong Kong.

In a statement the board said it published the list to alert investors ofcompanies whose audits are not subject to US oversight.

?As long as those obstacles persist, however, investors in US markets whorely on those firms' audit reports are deprived of the potential benefits ofPCAOB inspections of those auditors,? the board said in a statement.

Among the UK companies are Vodafone, BHP Billiton, HSBC, Barclays and BT. ThePCAOB is hoping new legislation, traveling through congress as part of the vastUS financial reform bill, will allow it to share information with its EUcounterparts.

If a solution can not be reached the PCAOB has the option to revoke thelicenses of overseas audit firms, which will stop them from auditing USregistrants.

Further reading:ISSUERAUDIT CLIENTS OF NON-U.S. REGISTERED FIRMS IN JURISDICTIONS WHERE THE PCAOB ISDENIED ACCESS TO CONDUCT INSPECTIONS