The Public Company Accounting Oversight Board (PCAOB) has proposed a rule change to the board’s responsibilities regarding the Holding Foreign Companies Accountable Act (HFCAA).
The recommendation focuses on providing a framework for the body to use when determining whether it is unable to investigate foreign-registered public accounting firms due to the position of authorities in said jurisdictions.
As a result, the proposed rule would establish the manner of the board’s determinations and the factors the board will evaluate when assessing whether a determination is warranted.
It will also include the form, public availability, effective date, and duration of such determinations, as well as the process by which the board can modify its determinations.
William Duhnke III, chair of the PCAOB, said: “Cooperation between the PCAOB and our international counterparts is vital to facilitating meaningful audit oversight and to strengthening investor protection.
“This rule will enable the PCAOB to fulfill its responsibilities under the Holding Foreign Companies Accountable Act, a law passed with extraordinary bipartisan support.”
He added that the rule “addresses situations where overseas authorities have denied” necessary access to the PCAOB.
The body has requested public comment on the proposal by July 12, 2021.