US, China Near Deal To Allow Audit Inspection of NY-Listed Chinese Companies (wsj.com) 23
The U.S. and China are nearing an agreement that would allow American accounting regulators to travel to Hong Kong to inspect the audit records of Chinese companies listed in New York, WSJ reported Thursday, citing people familiar with the matter, as the two countries move toward resolving a yearslong standoff. From the report: Securities regulators in Beijing are making arrangements for U.S.-listed Chinese companies and their accounting firms to transfer their audit working papers and other data from mainland China to Hong Kong, the people said. Regulators from the U.S. Public Company Accounting Oversight Board would then travel to the semiautonomous city to perform on-site inspections of the Chinese companies' auditors and their records, they added. The China Securities Regulatory Commission recently informed some accounting firms and companies about the plan, the people said, adding that U.S. accounting inspectors could arrive in Hong Kong as soon as next month. A final agreement can only be reached if the U.S. side determines that it has full access to the audit working papers, they said. The CSRC said, in response to a Wall Street Journal query, that it doesn't have any relevant information to disclose. The PCAOB declined to comment. Earlier this month, Erica Williams, chair of the PCAOB, told the Journal that U.S. accounting inspectors and investigators were prepared to travel to inspect Chinese companies' audit work papers when an agreement was in place. "We have teams ready, bags packed and ready to go -- if we have an agreement that's reached, so that we can actually test out that agreement and make sure that what we have in the agreement on paper is actually working in practice," Ms. Williams said, adding that she herself is prepared to go if need be.
Iin other words. . . (Score:3)
China has been taking its good 'ol time so it can make up fake documentation for the auditors to look over. Just another month and they'll be ready.
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Re:Iin other words. . . (Score:5, Insightful)
Stop negotiating and just delist them. They never should've been on the NYSE in the first place. They've never met the requirements for being listed there, they're never going to, and there's no advantage to the US in having them listed; all the benefits of the arrangement flow one way only. Why is this taking so long? Just tell them NO already.
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There's also the small matter that, from a personal safety perspective, it is highly inadvisable for any US government official to travel to Hong Kong, with the new "national security" law in place. While there, you have no legal rights of any kind.
I think you mean "inadvisable for ordinary US citizens". Government officials have the option of diplomatic immunity. So, unless there's a big public outcry in the host country, even if they're caught doing something patently illegal anywhere, such people can be quietly slipped out after some token detention. There are, of course, notorious exceptions, but these tend to happen in countries with a weak central government
When relations between already antagonistic countries deteriorate, ordinary citizens can
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> arrested and detained indefinitely for crimes that would previously be punished merely by
> deporting and declaring the person non grata.
Yes, we've *seen* that happen, in China, several times in the last five years.
> Government officials have the option of diplomatic immunity.
Sure, and under international law, the worst China could do is send them home. There's just one
problem: the Chinese government
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Nonsense. Of course auditors would travel under some sort of immunity. As to cooking the books: If the US sends actually competent auditors, that is highly risky. Caveat: I actually work part of my time as an auditor....
Listen, I do not like China one bit, but devolving into fact-ignoring "China BAAD!" rhetoric helps nobody.
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why I'll never understand foreign relations (Score:1)
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We're pretending that's not happening for the next few months, in order to permit those who currently hold power to maintain the best chances of election victory. After that's over and nobody cares what the public thinks again for 1.8 years, we'll be back to the other thing.
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We're about to go to war with a country,
We're not about to go to war with China.
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Audit (Score:1)
"on-site" not actually on-site (Score:5, Insightful)
The auditors won't actually see the real operation, but a Potemkin one on Hong Kong. This will nevertheless be accepted as equivalent to an actual on-site audit and will open doors for China in US equities markets. Hedge funds, pension funds and all the other pools of wealth are going to use this vehicle to flush trillions of USD into China.
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And when it all goes belly up the US taxpayer will bail them out.
Why on earth were they listed if they weren't audited in the first place?
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Why on earth were they listed
There is all kinds of crap listed, and there should be; a healthy market has many grades of equities. That's not what is important. The important thing is what standards are investors applying; just because something is listed doesn't mean CalPERS ($0.5 trillion in assets) or whatever can hold it. What they may hold is a function of their own policies, as it should be. The scam occurring here is to make Chinese equities have parity with good equities; *they are trying to check a box so they can use the
"Allow", huh? (Score:3)
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Keep it simple, just end it. (Score:3)
Recent IPOs or new listings on companies based in China the past few weeks have resulted in pump and dump price action. The joke continues.
Hong Kong vs Mainland (Score:2)