The US and European Union have agreed to a general framework on how officials on both sides of the Atlantic will cooperate to oversee auditing firms. Although "the practical applications will have to be worked out," the cooperation is a step towards creating global accounting standards.
The two governments reached an agreement on how to deal with European auditors that work in the US. The US requires that those auditors register with the US Public Accounting Oversight Board (PCAOB) and be inspected every three years. The EU opposed this but then agreed to create PCAOB style oversight bodies in each European state, in order to ensure that those auditors meet US standards.
PCAOB chairman William McDonough says: "We hope to be able to rely to a great extent on the inspection work of other regulators and it is in that regard that I especially welcome the establishment of new independent oversight systems outside of the United States."
As auditors do not need to be inspected for a few years, the US and EU have time to determine how to carry out the inspections until the new EU system is in place.