By Scott Murdoch
HONG KONG (Reuters) – Chinese authorities are working with U.S. members to prevent Chinese companies from being removed from U.S. stock markets, a Chinese regulatory official said Thursday as a lengthy debate over auditing standards erupted.
U.S. authorities are on the verge of expelling foreign companies https://www.reuters.com/article/us-usa-sec-foreigncompanies-idUSKBN2BG2AI American stock exchanges if their audit does not meet U.S. standards.
The Public Company Accounting Oversight Board (PCAOB) and U.S. policy makers have long complained that they do not have access to audit papers for Chinese companies listed in the U.S.. Referring to national security concerns, Chinese authorities have been reluctant to inspect the working papers of local accounting firms with foreign regulators.
“We don’t think removing Chinese companies from the U.S. market is a good thing for either companies, global investors, or Sino-US relations,” said Shen Bing, director general of international affairs at the China Securities Regulatory Commission. he said at a conference in Hong Kong.
“We are working very hard to solve the audit problem with members of the US, communication is smooth and open today. There is a risk of removing the list of these companies but we are working very hard to prevent this from happening,” he added.
In December 2020, in the last weeks of his administration, President Donald Trump signed a law aimed at removing foreign companies from U.S. exchanges if they failed to meet U.S. auditing standards for three consecutive years.
The PCAOB enacted legislation in September. A map on the organization’s website https://pcaobus.org/oversight/international showed that China was the only jurisdiction that denied the PCAOB “the necessary access for oversight”.
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