China’s CSRC Willing To Work With US On Audit Deal
The China Securities Regulatory Commission (CSRC) has announced its readiness to collaborate with the U.S. on an audit deal. This is in response to the findings of deficiencies in audits of U.S.-listed Chinese companies by the U.S. Public Company Accounting Oversight Board (PCAOB). The PCAOB had gained access to Chinese company auditors’ records for the first time last year and revealed unacceptable deficiencies in the audits. The CSRC has expressed its willingness to work with its U.S. counterparts. This is to promote audit regulatory cooperation and protect the rights and interests of global investors.
Navigating US-China Tensions: Understanding the Recent PCAOB Inspection Results
In a statement to Reuters, the China Securities Regulatory Commission (CSRC) said the deficiencies found by the US Public Company Accounting Oversight Board (PCAOB) during their first-time inspection of Chinese auditors were normal. The inspections were part of a September deal that prevented nearly 200 China-based public companies. It was including Alibaba and JD.Com, from being delisted from US stock exchanges. Analysts believe that these deficiencies are unlikely to derail the audit deal, although it could be challenging to quickly improve auditing practices amid the current US-China tensions. The CSRC has stated that they will continue to work with the US to address the identified issues.
Improving Audit Results in China: What Auditors Need to Do
The audit of Chinese companies based in mainland China and Hong Kong has revealed high deficiency rates. This was leaving auditors with a significant amount of work to be done to meet the standards of inspection. Jackson Johnson, a former PCAOB inspector and president of the audit advisory firm Johnson Global Accountancy, has suggested that the audit results will need to be improved in order to pass the next inspection. With this in mind, auditors will need to put in considerable effort to address the findings. Moreover, reach the required standards.
PCAOB Findings Will Not Result in Stock Delisting
Despite any deficiencies found in the PCAOB’s recent inspections in Hong Kong, Weiheng Chen, senior partner at law firm Wilson Sonsini, has emphasized that these alone will not result in the restatement of a company’s financial statements, or cause any stock delisting. This deal comes at a crucial time, when many business leaders are concerned about the growing economic tensions between China and the US. The PCAOB’s actions represent a rare positive move in Sino-US relations. Moreover, serves as a reminder that both countries are still capable of working together.
CSRC and US Regulator Collaborate to Enhance Transparency
The China Securities Regulatory Commission (CSRC) is committed to working with the US regulator. This is to achieve audit cooperation based on mutual respect and trust. With the goal of protecting global investors and their rights and interests, CSRC is striving to build a normalized and sustainable cooperation mechanism. As China and the US continue to tackle audit deficiencies, this collaboration has the potential to increase transparency. Furthermore, trust in the financial markets, benefitting both investors and companies. This joint effort to enhance the quality of financial reporting. Moreover, services in the global market will ensure that all stakeholders have access to reliable and accurate information.
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Filed under: Bitcoin - @ May 14, 2023 4:02 am