Document ID: SEC-2009-0726-0001
Agency: sec
Document Type: Notice
Title: Public Company Accounting Oversight Board; Order Approving Proposed Amendment to Board Rules Relating to Inspections
Posted Date: 2009-06-02T04:00Z

[Federal Register: June 2, 2009 (Volume 74, Number 104)]
[Notices]               
[Page 26444-26445]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jn09-112]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59991; File No. PCAOB-2008-06]

 
Public Company Accounting Oversight Board; Order Approving 
Proposed Amendment to Board Rules Relating to Inspections

May 28, 2009.

I. Introduction

    On December 9, 2008, the Public Company Accounting Oversight Board 
(the ``Board'' or the ``PCAOB'') filed with the Securities and Exchange 
Commission (the ``Commission'') a proposed rule amendment (PCAOB-2008-
06) pursuant to Section 107(b) of the Sarbanes-Oxley Act of 2002 (the 
``Act'') relating to the Board's rules governing inspections of 
registered public accounting firms. Notice of the proposed rule 
amendment was published in the Federal Register on April 24, 2009.\1\ 
The Commission received four comment letters relating to the proposed 
rule amendment. For the reasons discussed below, the Commission is 
granting approval of the proposed rule amendment.
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    \1\ See SEC Release No. 34-59792 (April 20, 2009); 74 FR 18753 
(April 24, 2009).
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II. Description

    On December 9, 2008, the PCAOB submitted to the Commission a 
proposed amendment to its inspection rules to adjust the inspection 
frequency requirements for certain non-U.S. registered public 
accounting firms. The proposed amendment would add paragraph (f) to 
existing Rule 4003 to provide that, with respect to any foreign 
registered public accounting firm that under the Board's inspection 
rules had a 2008 deadline for the first Board inspection, such deadline 
would be extended to 2009. Pursuant to the requirements of Section 
107(b) of the Act and Section 19(b) of the Securities Exchange Act of 
1934 (the ``Exchange Act''), the Commission published the proposed 
amendment for public comment on April 20, 2009.

III. Discussion

    Section 104 of the Act requires the PCAOB to conduct a continuing 
program of inspections to assess the degree of compliance of each 
registered public accounting firm and associated persons of that firm 
with the Act, the rules of the PCAOB, the rules of the Commission, and 
professional standards, in connection with its performance of audits, 
issuance of audit reports, and related matters involving issuers. 
Section 104(b)(1)(B) of the Act requires the PCAOB to conduct an 
inspection, at least once every three years, of each registered firm 
that regularly provides audit reports for 100 or fewer issuers, and 
Section 104(b)(2) of the Act authorizes the PCAOB to adopt rules 
adjusting that frequency.
    The Commission received four comment letters relating to the 
proposed rule amendment. Three of the comments came from registered 
public accounting firms \2\ and one came from a foreign regulator.\3\ 
The letters from the accounting firms supported adoption of the 
amendment, although one questioned whether a one-year delay provided 
sufficient time for resolution of the issues related to the affected 
inspections. While not specifically related to the proposed amendment, 
all of the commenters also reiterated views

[[Page 26445]]

on foreign inspections more generally, which they indicated they also 
had expressed to the PCAOB in response to a Board request for comment 
issued concurrently with the issuance of the proposed amendment. We are 
mindful of these and other views regarding the implications of foreign 
inspections. We will continue to work with the PCAOB on these issues 
and encourage the PCAOB to consider these comments in connection with 
any future action the Board considers, including the impact of a 
further delay of the inspections affected by this proposed amendment.
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    \2\ Deloitte Touche Tohmatsu; PricewaterhouseCoopers LLP; and 
Ernst & Young LLP.
    \3\ China Securities Regulatory Commission.
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    The proposed amendment itself does not limit the PCAOB's authority 
to conduct inspections at any time and does not affect registered 
firms' obligations under the Act. Nor does it, nor could it, resolve 
the broader views expressed by the commenters. However, as the Board 
explained, the adjustment would provide additional time to continue 
discussions on outstanding matters and work towards cooperation and 
coordination with authorities in all relevant jurisdictions. The 
adjustment will accomplish this while delaying a relatively small 
number of inspections.

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed amendment to the Board's rules governing inspections of 
registered public accounting firms are consistent with the requirements 
of the Act and the securities laws and are necessary or appropriate in 
the public interest or for the protection of investors.
    It is therefore ordered, pursuant to Section 107 of the Act and 
Section 19(b)(2) of the Exchange Act, that the proposed rule amendment 
(File No. PCAOB-2008-06) be and hereby is approved.

    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-12744 Filed 6-1-09; 8:45 am]

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