The SEC Allows US Officials to Audit Chinese and Hong Kong Firms

The U.S. Public Company Accounting Oversight Board (PCAOB) can view all audit work materials without any redactions, as agreed by the Securities and Exchange Commission (SEC) and China. According to a statement issued by SEC Chairperson Gary Gensler on Friday, inspectors would have direct access to testimony from all employees of auditing firms. SEC To Investigate Audit Firms In China In a prepared statement, Gensler stated that only if (U.S. regulators) can effectively check and investigate audit firms in China will this agreement have any real relevance. About 200 Chinese issuers that utilize such an audit agreement between the U.S. and China would allow American regulators to review the auditing records of Chinese companies listed in the U.S. The agreement would ensure that U.S. investors would continue to have access to shares of significant Chinese companies while also being safeguarded by the objectivity of company audits. Public Company Accounting Oversight Board By the middle of September, U.S. regulatory authorities hope to have inspection teams in China. The PCAOB is required to evaluate by the end of the year if the Chinese government is still preventing access to the audit books. If an adverse finding is made, the U.S. may take steps like banning stock trading. Without a deal, 200 businesses, including Alibaba Group, the most significant e-commerce rival in the world, risked being banned from U.S. exchanges or havi...