Financial services: Commission extends equivalence and adequacy of US audit competent authorities

The European Commission has adopted two new decisions to grant the US competent authorities equivalence and adequacy in the area of statutory audit for a further six years. These decisions reflect the good cooperation in the audit area between the Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) with the EU authorities. At the same time these decisions reflect the objective to come to full mutual reliance in this area. These decisions will enable EU audit supervisors to continue to cooperate on audit oversight with their US counterparts, in line with the EU Audit Directive. This Directive lays down the rules for statutory auditors and audit firms in the EU, and includes provisions on the international cooperation in the field of auditing, in particular on the exchange of information relevant to audit oversight. Good cooperation between audit oversight bodies contributes to higher audit quality, which is important for the functioning of capital markets and investor protection. Enhanced audit oversight through increased bilateral cooperation across the Atlantic, including for firms active on both sides, helps safeguard the EU’s interest in well regulated and supervised markets. These decisions extend the current agreement, which was set to expire on 31 July 2022, for a further six years until 31 July 2028. More information is available online.