House Leaders Sponsor Legislation Allowing PCAOB to Share Information with Foreign Audit Regulators

Legislation allowing the PCAOB to share confidential information with regulators of foreign firms has been introduced by House Financial Services Chair Barney Frank. The measure, HR 3346, was co-sponsored by Rep. Paul Kanjorski, Chair of the Capital Markets Subcommittee. The draft legislation would amend the Sarbanes-Oxley Act to allow the Board to share confidential information obtained in connection with inspections and investigations with foreign audit oversight authorities. A condition of the information sharing permission is that the foreign audit overseer provide appropriate assurances of confidentiality, as determined by the Board. Information may be shared with the foreign regulator when, in the Board’s discretion, when necessary to accomplish the purposes of Sarbanes-Oxley or to protect investors. Sarbanes-Oxley currently authorizes the Board to share information with the SEC and other federal regulators.

The legislation would add a new section to the Sarbanes-Oxley Act defining the term foreign auditor oversight authority to mean any governmental body or other entity empowered by a foreign government to conduct inspections of public accounting firms or otherwise to administer or enforce laws related to the regulation of public accounting firms.

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