According to reports quoting people with knowledge of the matter, the U.S. audit watchdog’s onsite inspection of the audit work of Chinese companies with New York stock exchange listings, which began in Hong Kong in September, has concluded. This has raised hopes for an end to a protracted dispute.
The Public Company Accounting Oversight Board (PCAOB), a U.S. audit watchdog, finished its seven-week onsite work on Friday, according to the sources, who declined to be named because they lacked media authorization.
After the two nations agreed to a settlement in August to end a dispute that threatened to bar more than 200 Chinese companies, including tech giant Alibaba Group Holding Ltd., from U.S. exchanges, the inspection got underway in Hong Kong.
There were no comments from the PCAOB.
According to reports, it was also too soon to say whether the onsite inspection had satisfied the U.S. agency, which had stated that it would not accept any restrictions on its access to the audit papers of Chinese companies that were listed on the New York Stock Exchange.
On Friday, Bloomberg reported—citing sources with knowledge of the situation—that on-site U.S. inspections of Chinese company audits had already been finished ahead of schedule.
The news that the audit papers’ onsite inspection had come to an end caused Chinese markets to soar on Friday, adding to general optimism that China might relax its strict COVID restrictions.
According to Reuters, American regulators selected a number of Chinese firms with U.S. listings, including e-commerce giants Alibaba and Yum China Holdings Inc., for on-site audit inspection.
According to the first source and a fourth source with knowledge of the situation, some PCAOB employees who were conducting on-site inspections into the audit documents of Chinese companies will return to the United States over the weekend.
Despite the watchdog’s onsite work being completed, the first source stated on Friday that inspection will continue. The U.S. agency may also request additional information once it returns, as is standard inspection practice.
According to this source, the inspection will formally be over once a final report on whether China is a market that U.S. regulators can access is released, which is anticipated in the coming weeks.
Since more than ten years ago, U.S. regulators have demanded access to the audit records of Chinese companies that are listed on the American stock exchange, but Beijing has been reluctant to allow U.S. regulators to inspect its accounting firms, citing national security concerns.
(Adapted from EconomicTimes.com)
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