Under Sarbanes-Oxley, public company auditors are required to be
registered with the Public Company Accounting Oversight Board
(PCAOB). The PCAOB is required to conduct a continuing program of
inspections to assess the degree of compliance of each registered
public accounting firm with Sarbanes-Oxley, SEC and PCAOB rules,
and professional standards. PCAOB inspections of audit firms are
supposed to be conducted annually for audit firms that regularly
audit more than 100 issuers, and at least once every three years
for all other auditing firms.
For various reasons, the PCAOB has not been able to conduct
examinations of a number of non-US auditors.1 In at
least one comment letter, the SEC staff stated that as a result of
the inability of the PCAOB to perform its inspection of the
issuer's auditor, "investors in the U.S. markets who rely
on your auditor's audit reports are deprived of the benefits of
PCAOB inspections of auditors." The SEC required the issuer to
include
