Tuesday, September 27, 2022

US, China agree to audit China-based company business accounts

The US and Chinese governments on Friday announced a deal that would allow US regulators access to accounts located in China, an important first step in preventing some 200 Chinese companies from being delisted from US stock exchanges.

The agreement is a major breakthrough in the long-running dispute between the US and China.

For more than 10 years, China has not allowed foreign regulators to inspect or audit Chinese companies, arguing they protect state secrets.

In a statement Friday, America’s auditing oversight body – the Public Company Accounting Oversight Board (PCAOB) – said its officers had signed the protocol statement.

a signed agreement with China Securities Regulatory Commission (CSRC) Or the China Securities Regulatory Commission and the Chinese Ministry of Finance will allow full access to inspection and investigation of registered public accounting firms located in mainland China and Hong Kong “in full, consistent with US law.”

The PCAOB statement said the agreement had the sole discretion of the companies, audit assignments, and investigations or investigations into potential breaches, without consultation or input from the Chinese authorities.

He said he has established procedures for board inspectors and investigators to review audit documents with all information and maintain the information as needed for PCAOB.

The Board may also interview and testify personnel related to all audits conducted or examined by the PCAOB.

The council said it would prepare inspectors in mainland China and Hong Kong to begin the audit in mid-September.

In a statement, PCAOB President Erica Y Williams said while the agreement was a success, it was only the first step. He underlined that “the real test is whether the agreed-upon words will be implemented on the paper.”

Williams said he would notify the PCAOB of a decision on whether or not to complete the work without a hitch by the end of the year.

The PCAOB will investigate and investigate public accounting firms registered in more than 50 jurisdictions worldwide as mandated by Congress. But for more than 10 years, China has blocked the council’s access to audit public accounting firms in mainland China and Hong Kong.

In 2020 the U.S. Congress passed the Holding Foreign Companies Accountable Act, which requires all companies listed on U.S. stock exchanges to be subject to PCAOB inspections or U.S. stock exchanges. Must be removed from the exchange by the Securities and Exchange Commission. This prompted talks between the US and China. [em/pp]

Nation World News Desk
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