Audits of Chinese Companies Are Highly Deficient, U.S. Regulator Says
Also: China says willing to work with U.S. on audit deal as challenges loom (Reuters)
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Source: Wall Street Journal
Audits of Chinese Companies Are Highly Deficient, U.S. Regulator Says
PCAOB says its first inspections in China and Hong Kong found issues in seven of eight audits reviewed
By Mark Maurer
May 10, 2023 12:20 pm ET
The Public Company Accounting Oversight Board found significant auditing deficiencies in its first ever set of inspections in China and Hong Kong, saying that local affiliates of KPMG and PricewaterhouseCoopers missed the mark on auditing U.S.-listed companies in the region.
The U.S. audit watchdog last fall completed its first set of inspections of China-based audit firms after years of Chinese regulators refusing to allow such reviews on national-security concerns. After PCAOB staff returned from Hong Kong, the regulator in December said it obtained full access to inspect the firms.
More than 200 Chinese companies had been facing the risk of a delisting from American stock exchanges if their auditors couldn’t undergo a PCAOB inspection for three consecutive years, due to a U.S. law signed in 2020. The PCAOB’s ability to conduct inspections effectively restarted the three-year delisting clock for the companies, a time frame later reduced to two years after Congress passed legislation in late December.
The landmark trip covered the inspection of the audits of eight companies at two accounting firms, KPMG Huazhen LLP in mainland China and PricewaterhouseCoopers in Hong Kong, including state-owned companies and businesses operating in sensitive industries. The PCAOB’s inspection teams select certain completed audits conducted by a firm for review. It doesn’t identify in its inspection reports the companies at the center of the audits being reviewed.
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Read more: https://www.wsj.com/amp/articles/audits-of-chinese-companies-are-highly-deficient-u-s-regulator-says-2da99766
Non-Paywalled link: https://archive.is/9RWG5
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Source: Reuters
3 minute read May 11, 2023 3:05 PM EDT Last Updated 18 hours ago
China says willing to work with U.S. on audit deal as challenges loom
By Xie Yu
HONG KONG, May 11 (Reuters) - China's securities watchdog on Thursday said that it was willing to work with its counterparts in the United States to promote regulatory cooperation on audits and safeguard the rights and interests of global investors.
The China Securities Regulatory Commission (CSRC) was commenting a day after a U.S. accounting watchdog said that it found unacceptable deficiencies in audits of U.S.-listed Chinese companies.
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The CRSC statement said "the inspection report also didn't conclude that the audit opinions by relevant auditors were inappropriate," and that it believed the deficiencies found would help auditing firms rectify their problems and improve quality.
Analysts said the deficiencies found by the U.S. watchdog were unlikely to derail the audit deal, but it would be challenging to turn around practices quickly amid continued U.S.- China tensions.
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Read more: https://www.reuters.com/world/china/china-regulator-says-willing-work-with-us-audit-cooperation-2023-05-11
Non-paywalled link: https://finance.yahoo.com/news/china-regulator-says-willing-u-082256585.html