China, US regulators start talks on audit inspection of Chinese companies on American exchanges amid moves to delist these firms
- The China Securities Regulatory Commission said its talks with US authorities over audit inspection requirements ‘have made some progress’
- US regulator the Public Company Accounting Oversight Board said it was “unable to inspect or investigate completely” 15 Hong Kong and mainland accounting firms
China’s securities regulator and American authorities have initiated talks on the audit inspection of US-listed Chinese companies, which could stave off the potential delisting of these firms after years of non-compliance.
“The relevant regulators of China and the US have started the negotiations over the regulatory cooperation issues [and] have made some progress,” according to a statement from the China Securities Regulatory Commission (CSRC) on Friday.
The CSRC released the statement soon after US regulator the Public Company Accounting Oversight Board (PCAOB) published early on Friday a report, which determined that it was “unable to inspect or investigate completely” registered public accounting firms headquartered in mainland China and Hong Kong because of the position taken by authorities in those markets.
Seven mainland Chinese and eight Hong Kong accounting firms are currently overdue for inspection, according to the PCAOB. The report indicated that the PCAOB has never completed an inspection of a mainland Chinese firm and has not finished an inspection of a Hong Kong firm since 2010.
The 15 accounting firms mentioned in the US regulator’s report are responsible for auditing 191 US-listed Chinese firms with a combined market capitalisation at US$1.9 trillion.
