China Urges Frank Dialogue on Cross-Border Audit Reviews
What’s new: China’s securities watchdog said the right way to improve cross-border cooperation on audit inspections is to have frank dialogue (link in Chinese). China has proposed joint accounting inspection plans repeatedly since 2019 and has shown “full sincerity for cooperation,” the China Securities Regulatory Commission (CSRC) said Sunday.
The Trump administration issued a report Thursday recommending that regulators delist U.S.-traded Chinese stocks that fail to meet auditing requirements by January 2022.
The background: The two countries have had a longstanding dispute between regulators over access to audits of U.S.-listed Chinese companies.
Yi Huiman, China’s top securities regulatory official, told Caixin in an interview in June that China has never banned or stopped Chinese companies from providing audit working papers to overseas regulators.
Yi said although joint inspection and audit working papers are important in combating crimes in global capital markets, they are only one important element in cross-border regulatory cooperation.
“More importantly, a high degree of mutual trust between regulators should be built through full communication and collaboration, and on this basis, a joint law enforcement alliance should be established to combat cross-border securities crimes,” he said.
In May, the U.S. Senate approved legislation that would ban any company from being listed on any U.S. stock exchange if the Public Company Accounting Oversight Board, an auditing regulator, is unable to inspect the auditor that prepares the company’s financial reports for three years in a row. To become law, the measure would have to pass the House of Representatives and be signed by the president.
Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.
Contact reporter Timmy Shen (email@example.com) and editor Bob Simison (firstname.lastname@example.org).
Download our app to receive breaking news alerts and read the news on the go.
- MOST POPULAR