China’s accounting problem

KPMG offices in Leeds, West Yorkshire, UK. May...

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The Big Four — PwC, Deloitte & Touche, KPMG and Ernst & Youngaudit the books of most of the world’s largest corporations through networks of legally separate audit firms. Their Chinese arms, which also audit Chinese operations of large multinational companies, have also been beyond the reach of PCAOB inspections.

via Analysis: Painful choices loom on China’s accounting problem

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The Importance of Accounting Standards

Picture of the Norwegian Parliament.

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By MICHAEL RAPOPORT

U.S. regulators have reached an agreement with authorities in Norway that will reopen Norway’s accounting firms to U.S. oversight.

The deal between the U.S. Public Company Accounting Oversight Board and Norway’s Financial Supervisory Authority, announced Wednesday, provides for the agencies to jointly inspect accounting firms in Norway that audit or help audit U.S.-traded companies, including multinational companies with operations in Norway.

The U.S. board conducts regular inspections of audit firms under its purview to assess their performance and compliance with accounting rules and professional standards. Norway has five firms involved in audits of U.S.-traded companies, including affiliates of each of the Big Four accounting firms.

The board reached similar agreements with the U.K. and Switzerland earlier this year to allow inspections. They and other European countries had been blocking U.S. inspections of their firms since 2008 in a dispute over information sharing. The accounting-oversight body is still negotiating with a number of other countries that don’t allow U.S. inspections, notably China.

Write to Michael Rapoport at Michael.Rapoport@dowjones.com

via Norway and U.S. Strike Deal on Accounting Oversight – WSJ.com.