The Belgian Audit Oversight College (hereafter ‘the BAOC’) and its counterpart in the United States, the Public Company Accounting Oversight Board (PCAOB), are signing a historic transatlantic cooperation agreement, which provides lasting support for the U.S. listing of Belgian companies.
The BAOC and the PCAOB oversee, each in its own country, the quality of the services provided by auditors (audit firms) to public interest entities. In Belgium, public interest entities are mainly credit institutions, insurance companies and enterprises listed on a regulated market[1].
This cooperation agreement will enable the BAOC, together with the PCAOB, to carry out joint inspections in Belgium of audit firms who issue audit reports for Belgian companies listed on U.S. regulated markets (NYSE, NASDAQ, OTC, etc.).
Conversely, the BAOC can also call upon the assistance of the PCAOB in examining the quality of the audit services provided by U.S. auditors for Belgian enterprises whose audits are overseen by the BAOC and the PCAOB, for example in the context of the consolidation of international groups.
The joint inspections in Belgium will take place at least every three years at all auditors of Belgian companies listed on a U.S. regulated market. As a result of recent legislation in the U.S.[2], Belgian companies whose auditors have not been inspected by the PCAOB every three years would be prohibited by the SEC from having their securities traded on U.S. regulated markets.
In consultation with the PCAOB, the BAOC intends to start the joint inspections in Belgium in the course of 2021.
The signing of the cooperation agreement between the BAOC and the PCAOB is the result of two years of negotiations, not only between the parties, but also with the valued cooperation of the Committee of European Supervisors of Audit Oversight Bodies (CEAOB), as well as the European Data Protection Board and the Belgian Data Protection Authority.
President of the BAOC, Prof. Bénédicte Vessié:
‘The BAOC is particularly pleased with the fruitful cooperation with the PCAOB, the CEAOB, the European Data Protection Board and the Belgian Data Protection Authority that led to the signing of this important transatlantic cooperation agreement and accompanying data protection agreement.
As the BAOC, we have already taken the signing of this agreement into account in our action plan for 2021 and the following years. We will do everything in our capabilities to achieve as many joint inspections as possible with the PCAOB to control the quality of audit services by audit firms and also to protect the interests of Belgian companies in maintaining their U.S. listing.’
Belgium is the second country in the EU to conclude a cooperation agreement with the PCAOB along with a data protection agreement that fully complies with the applicable regulations on the protection of personal data and with the position of the European Data Protection Committee in this regard. The Belgian Data Protection Authority has approved the data protection agreement.
The cooperation agreement and the data protection agreement are available on the website of the BAOC.
[1] In Belgium, the BAOC is also the competent supervisor to monitor the quality of auditing services provided by auditors to entities other than public interest entities.
[2] With the entry into force of the Holding Foreign Companies Accountable Act (HFCAC), in early 2021.
Source: FSMA
