China And The U.S. Signs Audit Agreement In Push To Avoid Delistings

Welcome to Sound of Hope News, I'm Golden Lee. The U.S. and China have announced that they signed an audit oversight agreement allowing the U.S. Accounting Oversight Board access to Chinese audit data. U.S. regulators have long requested access to audit papers of Chinese companies listed on U.S. stock exchanges, but China, citing security concerns, has always been reluctant to let overseas regulators audit its accounting firms. This agreement could potentially put an end to the dispute that promised to kick over 200 Chinese companies off U.S. stock exchanges. However, the U.S. Public Company Accounting Oversight Board and the China Securities Regulatory Commission released deferring statements about the deal. The CSRC statement says, The two sides will communicate and coordinate in advance to plan for inspections and investigations. The materials, such as audit work papers that the U.S. regulators need access to, will be obtained by and transferred through the Chinese side. The Chinese side will also take part in and assist in the interviews and testimonies of relevant personnel of audit firms requested by the U.S. side. However, the official statement of the U.S. PCAOB did not include this. Instead, it says, The PCAOB will have full access to the audit working papers to get all the information we need, without any exceptions. The two statements are contradictory. Commentator Shen Wei told Sound of Hope that if the CCP still sets up various obstacles during the cooperation, this agreement is dead in water. Crucially, he pointed to the inconsistent wording of the statements made by the Chinese authorities and their U.S. counterparts. U.S. authorities have stressed that this deal did not mean China was in compliance with its rules, and that a determination will be made once the PCAOB have completed their inspections and are satisfied China has granted full access as promised. PCAOB Chairman Erica Williams emphasized that if the PCAOB fails to complete the audit work before December, Chinese enterprises still face the risk of delisting.