6810.1 In certain instances where the independent accountant is not licensed in the U.S. and not familiar to the staff, OCA may request information about the accountant's qualifications to audit financial statements that are filed with the SEC.
6810.2 Auditors licensed outside the U.S. must comply with all requirements of S-X 2-01, including SEC and PCAOB rules on auditor independence. S-X 2-01 permits a foreign auditor, solely for purposes of a foreign private issuer's initial registration statement, to be independent under SEC and PCAOB rules for at least the most recent audited fiscal year, provided that auditor is independent under local standards for all periods presented. The auditor must remain independent under SEC and PCAOB rules for all subsequent periods.
6810.3 The staff may question the location from which the audit report was rendered if there does not appear to be a logical relationship between that location and the location of the registrant's corporate offices, its principal operations, its principal assets, or where the audit work was principally conducted. The staff will consider all relevant factors in questioning the location from which the audit report was rendered. (Last updated: 9/30/2011)
6810.4 Auditors may be permitted or required by home-country regulations to render reports on the fairness or adequacy of consideration in an audit client's planned merger or non-monetary transaction. The services performed to render these reports may violate U.S. independence rules.
6810.5 Effective January 1, 2000, AICPA SEC Practice Section ("SECPS") rules established minimum requirements for the review of SEC filings by a designated "filing reviewer" within the independent accountant's U.S. firm or international organization knowledgeable about U.S. GAAP, U.S. GAAS, U.S. auditor independence and SEC reporting requirements. Although the SECPS no longer exists, the PCAOB has adopted the requirements of Appendix K, SECPS §1000.45 pursuant to PCAOB Rule 3400T, through its adoption of Interim Quality Control Standard 1000.08(n), which cross references SECPS § 1000.45. Prior to commencing review of initial registration statements, the staff may request confirmation that Appendix K was applied to the filing, as well as the name of the designated filing reviewer that the staff may contact with any questions concerning the application of those policies and procedures to the registration statement. The purpose of the procedure is to ensure that foreign auditors appropriately involve their designated filing reviewer prior to submission of registration statements. The staff will consider deferring the review of a registration statement where the application of the firm's established policies and procedures to that registration statement cannot be confirmed.
6810.6 The Appendix K requirements also apply to annual reports.
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