PCAOB chairman says China must cooperate on trans-border audit oversight to keep markets happy
US AUDIT WATCHDOG the PCAOB said its Chinese counterparts can no longer opt out of cooperating on joint inspections.
Chairman James R Doty (pictured) said an arbitrary position of refusing cross-border collaboration “will no longer fly”, claiming market pressures make capitulation inevitable.
Several Chinese companies have been de-listed in the US due to questionable accounting and rows with auditors, which have seen a number of firms resign.
Investors are becoming wary of US-listed Chinese firms and reverse mergers, and State-side regulator the SEC recently issued a warning about the problem.
The PCAOB travelled to Beijing last month to educate regulators there about the US vision of audit oversight, and the Americans hope China will return the favour.
A provisional date of October has been set for Chinese regulators to visit the US, and Doty said it is “quite likely to happen”.
It remains to be seen whether the two regulators will develop the required level of transparency, but Doty insisted: “Countries can no longer avoid the adverse market reactions of opting out – there are collateral consequences.”