Chinese and American officials reached an agreement to share audits of US-listed Chinese companies on August 26, taking the first step toward inspecting and investigating registered accounting firms in China and Hong Kong. The Public Company Accounting Oversight Board (PCAOB) in the US said it’s the most detailed agreement the regulator has ever reached with China. More than 160 Chinese companies are identified by the Securities and Exchange Commission (SEC) as non-compliant and face the risk of being delisted. “If the upcoming cooperation concludes to the satisfaction of both sides’ regulatory mandates, it is hopeful that the audit oversight issue of the US-listed Chinese companies will be resolved and delisting can be avoided,” China Securities Regulatory Commission (CSRC) officials told reporters. According to Reuters, US officials notified the selected companies on the morning of August 26 and plan to conduct inspections in Hong Kong by mid-September. [PCAOB; CSRC]
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