Exclusive: U.S. regulators are in China for audit deal talks – sources
2022.05.06 11:51
FILE PHOTO: Chinese and U.S. flags flutter outside the building of an American company in Beijing, China January 21, 2021. REUTERS/Tingshu Wang
By Xie Yu
HONG KONG (Reuters) – U.S. regulatory officials have arrived in Beijing seeking to settle a long-running dispute over the auditing compliance of U.S.-listed Chinese firms, three people familiar with the matter told Reuters.
The stand-off, if not resolved, could see Chinese firms kicked off New York bourses. This week the U.S. Securities and Exchange Commission added over 80 firms, including JD (NASDAQ:JD).com and China Petroleum (NYSE:SNP) & Chemical Corp to the list of companies facing possible expulsion.
The talks between officials from the U.S. Public Company Accounting Oversight Board (PCAOB) and their counterparts at the China Securities Regulatory Commission (CSRC) can be described as ‘late stage’ after China made concessions in recent months, the people said.
The PCAOB group is expected to exit quarantine and start working next week, one of the people said. If this visit proceeds as expected, the PCAOB is likely to send a bigger team to China later this year to conduct on-site inspections of local auditors, the person said.
The sources declined to be identified due to the sensitivity of the issue. The PCAOB and the CSRC did not respond to Reuters requests for comment.
Authorities in China have long been reluctant to let overseas regulators inspect local accounting firms, citing national security concerns.
As of Friday, the PCAOB has flagged 128 Chinese firms as at risk of being delisted.
