§7216 Foreign Public Accounting Firms

Summary

Foreign accounting firms that prepare or provide audit reports for U.S. public companies, brokers, or dealers must follow this law and the rules the Board and the Commission make, just like U.S. firms. Simply registering under the law does not by itself give U.S. federal or state courts power over a foreign firm, except for disputes between the foreign firm and the Board. The Board can also decide that a foreign firm that does not issue reports but plays a big role in making them should be treated like a public accounting firm for registration and oversight. If a foreign firm does important audit work, issues an audit report, or does interim reviews, it must give its audit work papers and related documents to the Commission or the Board when asked. A U.S. firm that relies on a foreign firm must also provide those foreign work papers and must get the foreign firm to agree to that production before depending on its work. The Commission and the Board can exempt foreign firms or groups of firms in certain cases. Foreign firms doing work for a U.S. registered firm must name a U.S. agent for service of requests or legal papers and must give the domestic firm a written, irrevocable power of attorney to accept service. Willful refusal to comply with requests is a violation. Staff may allow alternate ways to get documents, like using foreign regulators. Definition: a foreign public accounting firm is one organized and operating under foreign law.