• Register
Return to: Home > News > Regulation > PCAOB makes progress with Chinese regulators

PCAOB makes progress with Chinese regulators

The Public Company Accounting Oversight Board (PCAOB) is seeking alternatives ways of cross-border cooperation with Chinese regulators such as observational visits to build up mutual trust, a member of the board has unveiled.

During a conference at a university in California, PCAOB member Lewis Ferguson said the watchdog and Chinese authorities “have tentatively agreed on observational visits” in China where the US watchdog currently lacks cooperative agreements.

According to Ferguson, these visits will allow PCAOB inspectors to observe the Chinese authorities conducting their own audit oversight work and vice versa.

Although the ‘observational visits’ are not expected to become a substitute for a PCAOB inspection they might be “a trust building exercise between regulators,” Ferguson remarked.

Currently, China’s Security Regulatory Commission and Ministry of Finance do not permit the PCAOB to oversight China-based audit firms.

Chinese authorities maintain that an inspection conducted by a foreign agency violates its national sovereignty and can result in the disclosure of state secrets when the audits of state-owned companies are concerned.  

Ferguson also mentioned that the dialogue with Chinese authorities comprises the concerning issue of cooperation in the course of PCAOB investigations applying to cases such as Deloitte’s Chinese member firm.

Earlier this year Deloitte China refused to turn over the audit work of Longtop Financial Services to the US Securities and Exchange Commission in compliance with Chinese secrecy laws.

Ferguson was less optimistic in this respect and stressed that difficulties remain.  

“We continue to engage in dialogue with the Chinese authorities, but at this time it remains uncertain where this dialogue will ultimately lead,” Ferguson said.


Top Content

    Choosing the right location can have cast-iron benefits

    As Game of Thrones, one of the biggest television shows of all time, comes to an end, Joe Pickard looks at how tax incentives offered to television and film production companies help the wider economy.

    read more

    Primary financial statements: a game changer in reporting?

    International Accounting Standards Board chair Hans Hoogervorst delivered a speech at the Seminario International sobre NIIF y NIF, organised by the Consejo Mexicano de Normas de Información Financiera in Mexico. The Accountant presents the highlights.

    read more

    FASB readies standards for the netflix generation

    The US Financial Accounting Standards Board (FASB) has updated its accounting standard for entertainment, with a specific eye on keeping up to date with how episodic content, such as television programmes, is consumed in the modern world. Jonathan Minter reports.

    read more

    Brexit: why it takes two to tango

    Former TA editor Vincent Huck, now editor of Insurance Asset Risk, looks at why Brexit might unleash geopolitical intrigue in Europe’s accounting standard-setting scene – and why IFRS 17 will be an incredible source of opportunity for firms in the coming years.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.