- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Kyle Brasseur2022-08-26T14:19:00
U.S. audit regulators are set to end yearslong inspection barriers to the work of public accounting firms headquartered in mainland China and Hong Kong after the Public Company Accounting Oversight Board (PCAOB) reached agreement with Chinese regulators Friday on a new access framework.
The China Securities Regulatory Commission (CSRC) and the Ministry of Finance of the People’s Republic of China will allow the United States “complete access to the audit work papers, audit personnel, and other information we need to inspect and investigate any firm we choose, with no loopholes and no exceptions,” said PCAOB Chair Erica Williams in a statement. Talks between the two sides have been ongoing for months, with the United States standing firm it must receive full access for any deal to be reached.
Despite the agreement, part of a signed statement of protocol, U.S. regulators have made clear the ultimate test remains in whether China will uphold its end of the deal.
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The Public Company Accounting Oversight Board’s latest batch of 2021 audit inspection reports included a setback in results for Marcum largely related to the firm’s work dealing with special purpose acquisition companies.
The Public Company Accounting Oversight Board announced it received “complete access to inspect and investigate” audit firms in China and Hong Kong, potentially averting the delisting of hundreds of Chinese public companies from U.S. exchanges.
The Chinese affiliate of Big Four audit firm Deloitte agreed to pay a $20 million penalty and undertake extensive remedial measures as part of a settlement with the SEC for audit failures that included asking clients to conduct their own audit work.
Chinese authorities banned PwC’s Chinese unit from performing audits in the country for six months, labeling the subsidiary’s flawed audit work as complicit in the failure of giant property developer Evergrande.
Erica Williams was reappointed to a second term as chair of the Public Company Accounting Oversight Board after an ambitious first three years in the role that have seen the agency work to update many of its standards deemed outdated.
Software company Autodesk said it won’t restate several years of financial statements following an audit committee investigation into potential accounting misconduct.
