China-US regulatory review "

Postdate: 2016-11-09

China and the United States report on the audit report reproduction waves.


On Monday, SEC officials tried in court to "threaten" Deloitte to hand over the audit report, which asked the court to suspend several international accounting firms' practice in China.


On the same day, the domestic media said the China Securities Regulatory Commission said it had completed a company in the preparation of accounting papers and finishing the completion of the relevant procedures to inform the United States prepared to provide the US Securities and Exchange Commission manuscript.


Analysts said that this means that the two sides in this issue is not incompatible, but there is to reconcile the space.


SEC officials asked the court to suspend the "five" institutions in China qualification According to Reuters, on Monday, a SEC official testimony at the hearing, once tried to persuade the judge to the world's top five accounting firms (Deloitte, Ernst & Young, KPMG , PricewaterhouseCoopers and BDO) in China to suspend the practice of qualification sanctions. This is undoubtedly the SEC so far, the SEC in order to get the audit report draft made the most radical move.


US regulators have been conducting fraud investigations in US-listed Chinese companies for more than two years, but the survey has been hampered by a number of Chinese firms that have refused to submit relevant audit documents to US institutions.


"Our investigation was significantly delayed." SEC Assistant Executive Director Laura Josephs said in court that Deloitte even continued to provide audits for the companies surveyed without having submitted the relevant audit records to the SEC opinion.


The administrative trial, which begins this week, will last a few weeks and if the SEC can successfully request a suspension of the firm's practice, it may force US-listed clients of those firms to withdraw from the market.


Michael Warden, Deloitte's attorney, said in a hearing that Deloitte's clients and other audit firms did not violate federal securities laws because they did not intentionally refuse to produce the documents.


PricewaterhouseCoopers Zhongtian Certified Public Accountants (hereinafter referred to as "Pricewaterhouse Coopers Zhongtian") yesterday to the "First Financial Daily" sent a statement also said that the Chinese accounting firm can not provide the required information of the US Securities and Exchange Commission Is due to the provisions of Chinese law and the direction of Chinese regulators. "The hearing today against the Big Four accounting firms in China and UOB (formerly BDO China) can not change this objective fact, nor solve the current problems."


"The impact of this litigation is that Chinese accounting firms may be penalized for failing to do what they can not do, putting the Chinese accounting firm in a stalemate in the regulatory bodies of both China and the US, as we have repeatedly mentioned , Only the collaboration between government communication is an effective way to break the deadlock. "PricewaterhouseCoopers transit said.


In fact, China and the United States on whether the accounting firm should provide working papers on the issue is not "incompatible", at least in the legal terms there is to reconcile the space, and the China Securities Regulatory Commission has also been the actual Action shows this.


"US law makes it clear that an accounting firm should provide working papers when an audit report is being investigated, and Chinese law does not prohibit the provision of working papers, except that certain conditions apply, for example, if the working papers involve state secrets, Major interests, without external approval can not be provided. "Cross-border litigation lawyer Hao Junbo in an interview with this analysis.


The SEC officials on the day of the testimony, according to "Shanghai Securities News" reported that the China Securities Regulatory Commission said it had completed a stock company in the accounting statement finishing work and fulfill the relevant procedures, has informed the United States to prepare to The US Securities and Exchange Commission to provide the draft, which reflects the Sino-US regulatory terms are not entirely contradictory.


Reported that this is the first time the China Securities Regulatory Commission to the United States to provide the relevant accounting papers. China Securities Regulatory Commission to provide the audit working papers to comply with China's relevant laws and regulations, is the Ministry of Finance, Ministry of Foreign Affairs, Ministry of Justice and other relevant ministries and the results of collaborative efforts.


May 7 this year, China Securities Regulatory Commission and the Chinese Ministry of Finance and the US Public Company Accounting Oversight Committee (PCAOB) signed a memorandum of law enforcement cooperation, marking the Sino-US cross-border enforcement of accounting audit cooperation officially launched. Relevant person in charge of the China Securities Regulatory Commission on May 24, said the ventilation will be involved in specific cases of law enforcement cases need to transfer the audit documents of listed companies, the US application, the Chinese side can provide accounting papers.


Although the United States hopes to enter the Chinese accounting firms to conduct daily supervision of this issue, the two sides have not yet reached an agreement, but can be seen that the door to the international capital market has been open to Chinese enterprises, which once lie in the regulatory barriers are being Gradually eliminated, and the crack in the accounting firm may also be gradually clear with the situation a little relieved.


"The US stock market is inseparable from the stock, the stock will not give up the opportunity to the United States financing, the sun is always the best preservatives, exposing those problems the company will eventually also in the stock a clean." Hao Junbo said.


First Financial Daily


Google 翻译(企业版):译者工具包网站翻译器全球商机洞察