Audit regulators have voted in a new rule for themselves to provide more time to finish inspections that are supposed to be completed in 2008, especially for overseas firms, because of the difficulties they’ve encountered in getting inspections completed.

They’re also looking for public comment on a second proposed rule change to extend the timeline for inspections that are to be completed in 2009. Both rules require the approval of the Securities and Exchange Commission to become effective.

Of the 1,900 audit firms registered with the PCAOB to do audit work in U.S. capital markets, 800 are located outside the United States, said PCAOB Chairman Mark Olson at a conference of the American Institute of Certified Public Accountants. “There is no relief in SOX, nor should there be, for those firms,” said Olson. “We have the same inspection requirement for them as we do for others.”

Still, the board is running into problems getting those inspections done. Under PCAOB’s Rule 4003, which governs inspection frequency, there are 134 firms in 42 countries that are required to be inspected but have not yet been inspected. The change approved by the PCAOB would give the board flexibility to push those inspections into 2009. In the proposed rule change, the board is looking for some additional flexibility to push some inspections due to be completed in 2009 out as far as three years.

In its release adopting the first rule change and proposing the second, the PCAOB says it has tried working with overseas authorities but has run into problems where its mandate conflicts with local laws. In some cases, the board’s ability to conduct inspections, either directly or in coordination with a local regulator, is complicated by local legal obstacles and sovereignty concerns. The board says it has tried to resolve issues with authorities in nine jurisdictions to get inspections done, but now recognizes it can be done in time to finish inspections in 2008.

In adopting and proposing the rules adjusting the inspection schedule, the PCAOB acknowledges investors’ interest in knowing which firms have not yet been inspected and warns firms they can’t stall the inspection indefinitely. The board is considering identifying firms where the inspections have been or may be delayed by the adjusted schedules. “In instances where a firm refuses to comply with, or unduly delays complying with, a Board request for information, the Board can impose various disciplinary and remedial sanctions,” Olson said during a board meeting to discuss the changes.