US and China reach audit deal allowing regulators to scrutinize accounting firms

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Beijing and Washington took a major step on Friday toward ending a dispute that threatened to drive Chinese firms, including Alibaba, out of US stock exchanges, by signing a pact allowing US regulators to vet accounting firms in China and Hong Kong. .

US regulators have long demanded access to audit documents from US-listed Chinese companies, but Beijing has been reluctant to let foreign regulators inspect accounting firms, citing security concerns.

The pact marks a major thaw in U.S.-China relations and comes as a huge relief to hundreds of Chinese companies and investors who have poured billions of dollars into companies that stand a chance of retaining access to China’s markets. deepest capitals in the world.

Although the details of the deal were laid out by both sides, US officials were cautious, warning that their views on China’s compliance would be determined by whether or not they had full access to audited documents from the parties. Chinese companies.

The Public Company Accounting Oversight Board (PCAOB), which oversees audits of U.S.-listed companies, said it was the most detailed and prescriptive agreement the regulator has ever reached with China.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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