U.S and Chinese Regulators Holding Talks Over Audit Deal

United States and Chinese regulators are currently holding talks with an aim to find a settlement over a long-standing dispute over the auditing compliance of Chinese companies listed in the U.S stock markets. If the two sides fail to come up with a solution, this could result to U.S listed Chinese companies kicked out of the U.S markets.

The bone of contention on the matter is that Chinese companies listed on the U.S markets use accounting methods which are not recognized by the U.S. Public Company Accounting Oversight Board (PCAOB).

Last week, U.S Securities and Exchange Commission (SEC) added more than 80 Chinese companies including China Petroleum & Chemical Corp. (SHA: 600028) and leading online retailer JD.com (HK: 9618) to the list of Chinese companies facing a possible expulsion.

Sources involved in the matter revealed talks by officials from PCAOB and their counterparts at the China Securities Regulatory Commission (CSRC) are on their late stage are on their late stages since China has made concessions in recent months.

On the other side, PCAOB dismissed the sentiments that its officials are in China held talks with CSRC on the matter further adding that the last time such development happened was back in 2017.

Recent reports that PCAOB officials are currently in China, or that PCAOB officials were in China earlier this year to conduct face-to-face negotiations, are untrue. The PCAOB has not sent any personnel to China since 2017,” said a spokesperson from PCAOB.

The spokesperson however confirmed that the board was continuing to engage with the Chinese authorities but speculation of a final agreement on the stand-still remains premature.

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