The European Union and the US accounting watchdog have agreed to work towards the inspection of auditing firms by home-country public oversight bodies rather than host countries. Such a change would mirror the approach already adopted by the accounting profession.

In practice, the new arrangements would mean that the UK arm of a “big four” auditing firm would be inspected solely by the Financial Reporting Council (the UK’s oversight body) and not additionally by the Public Company Accounting Oversight Board in the US.