The US Securities and Exchange Commission (SEC) has requested
Chinese Big Four firms hand over documents related to the audits of
Chinese companies listed in the US, according to the news agency
Reuters.
The move is likely to intensify tensions
between US and Chinese regulators who have been at a stand off over
Chinese audit work.
In May, the SEC sought legal enforcement for
Deloitte’s Chinese arm to hand over audit work papers and accused
the firm of violating the Sarbanes-Oxley Act and the Securities
Exchange Act of 1934.
However, Chinese law prohibits Chinese audit
firms to hand over documentation to foreign authorities, which has
placed Deloitte (and potentially other firms) in a precarious
position.
Reuters said PwC’s Chinese firm
confirmed it had received US requests to hand over Chinese audit
papers.
It is clear that US authorities, namely the
SEC and the audit watchdog PCAOB, are losing patience with the
impasse.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataIf a solution is not found, it is conceivable
US authorities could bar Chinese firms from auditing US-listed
companies, which is likely to lead to a string of Chinese companies
de-listing from US stock exchanges.
The SEC and the Big Four did not respond to
International Accounting Bulletin approaches for
comment.
