PCAOB and Swiss Regulators Will Share Information

The Public Company Accounting Oversight Board (PCAOB) entered into its first cooperative agreement with Swiss accounting and auditing regulators, reported Reuters.

The U.S. watchdog will begin its inspections in Switzerland in May, said the Wall Street Journal.

This is the first time in history that U.S. regulators will oversee Swiss accounting firms and be able to conduct joint inspections with Swiss authorities of those Swiss firms with clients trading securities on U.S. markets, including multinational corporations with businesses in Switzerland, said the Journal.

The agreement with the Swiss Federal Audit Oversight Authority and the Financial Market Supervisory Authority includes the sharing of confidential information, according to the PCAOB. The Dodd Frank Wall Street Reform and Consumer Protection Act, which was signed into law in July 2010, amended the Sarbanes-Oxley Act to permit the PCAOB to share confidential information with its non-U.S. counterparts under certain conditions, removing, stated the PCAOB, one of the “obstacles” to the U.S. oversight board’s inspections “asserted by European and certain other officials.”

By the end of this year it is the PCAOB’s goal to complete inspections of all the Swiss affiliates of the U.S. Big Four firms, said the Journal.

PCAOB Chairman James Doty said he hopes this accord will serve as a “model” for more cross-border collaboration between regulators, said Reuters.

The Swiss agreement is similar to another recent pact between the PCAOB and its U.K. counterpart, the Professional Oversight Board (POB), which was announced in January.