Beijing sent a team of regulatory authorities to Hong Kong to assist the US watchdog with on-site audit inspections related to Chinese companies, four people familiar with the matter said.
A landmark agreement last month between the two countries allows US regulators, for the first time, to inspect China-based accounting firms that audit the numbers of the country’s New York-listed companies.
The deal is an important step towards resolving a dispute that threatened to delist more than 200 Chinese companies from US stock exchanges.
About 10 officials from the China Securities Regulatory Commission (CSRC) and the Ministry of Finance arrived in Hong Kong and joined the US audit inspection, which began on Monday, three of the people said.
The officials will assist a team of inspectors from the Public Enterprise Accounting Oversight Board (PCAOB), the US audit oversight body, which is in Hong Kong for the job, the four people said.
Representatives from the CSRC and China’s Ministry of Finance did not immediately respond to requests for comment. The US enforcement agency did not respond to questions sent outside of business hours.
Reuters reported last month that US regulators had singled out several Chinese companies, including Alibaba and JD.com, for the audit inspection.
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The entire inspection process will take about eight to 10 weeks, two of the four sources said, in line with comments by US Securities and Exchange Commission (SEC) Chairman Gary Gensler at a meeting with lawmakers last week.
It was unclear whether Chinese officials will be present at all stages of the inspection process.
On-site inspections are being carried out at the Hong Kong offices of accounting firms related to selected Chinese companies, two of the sources said.
The PCAOB will spend the first week inspecting the compliance and internal control systems of auditing companies and then, starting in the second week, will review the audit work of the selected companies, they added.
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.
