A leading accountant has urged US and European regulators to patch up their differences and give clear guidance to auditors about who will monitor their work.
Mr Rick Bobrow, global chief executive of Ernst & Young, said the accounting firm was happy to comply with new oversight arrangements for auditors, but wanted to know what they were.
He warned that, if the US and European regulators imposed dual regulation, it could result in accounting firms charging higher fees to companies.
The US Public Company Accounting Oversight Board (PCAOB) and the European Commission have been at loggerheads for months over the PCAOB's plans to regulate foreign as well as domestic auditors.
Brussels is threatening equivalent measures against US accountants if the PCAOB insists that European auditors who work with US companies should register with it.
“It would be in our best interests, the profession's best interests, for the regulatory bodies to work through their differences and come up with a structure we can live with and does not create redundancies for us,” Mr Bobrow said in an interview.
“We do not want the costs to our clients to go up from what may be duplicative regulation.”
The PCAOB was created last year by US lawmakers in response to a series of business scandals but European Union finance ministers are angry at its global reach.
In June, the Securities and Exchange Commission, the US financial regulator, rejected calls by EU ministers for European auditors to be exempted from the PCAOB's oversight.
Talks between Brussels and the PCAOB are due to resume in September and Mr Bobrow said he hoped they could find a compromise on oversight. “We can comply,” he says. “We are just anxious to know what the rules are.”
Mr Bobrow also voices strong support for Sir David Tweedie, chairman of the International Accounting Standards Board, after recent attacks by banks and insurance companies on the body that writes global financial reporting rules.
The EU's accounting committee last month refused to endorse the IASB's standards on financial instruments and French president Jacques Chirac said its rules would have bad consequences for European economies.
But Mr Bobrow, noting other EU politicians had supported the IASB's work, says: “Chirac was entitled to his views but . . . the standards ought to be set by the people who really are experts in understanding the rules.”
Ernst & Young is fighting large lawsuits in the US and the UK, and some of its auditing is under intense scrutiny from lawmakers and regulators. In May, the SEC asked a judge to bar Ernst & Young from taking on new listed audit clients for six months.
The action is part of the SEC's action against Ernst & Young over its audits of PeopleSoft, the technology company, although the accounting firm denies any wrongdoing.