China, U.S. discussing audit deal plan as delistings loom

China’s and U.S.’ flags are seen printed on paper on this illustration taken January 27, 2022. REUTERS/Dado Ruvic/Illustration/File Picture

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BEIJING/HONG KONG, April 29 (Reuters) – China and U.S. regulators are discussing operational particulars of an audit deal that Beijing hopes to signal this yr, sources accustomed to the matter stated, within the newest transfer to attempt to maintain Chinese language corporations listed on U.S. exchanges.

A preliminary framework for audit supervision cooperation has been shaped, with China prone to classify much less info as confidential, doubtlessly permitting extra info into corporations’ audit working papers, one supply advised Reuters.

China can be discussing particulars of onsite inspections by the Public Firm Accounting Oversight Board (PCAOB), giving the U.S. audit regulator entry to such papers, three sources stated.

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Final week, Fang Xinghai, vice chairman of the China Securities Regulatory Fee (CSRC) stated he anticipated a deal within the close to future to permit PCAOB to conduct onsite audit inspections. learn extra

Within the long-running audit dispute between China and the USA, PCAOB is demanding full entry to audit working papers of New York-listed Chinese language corporations, that are saved in China.

The request has to this point been denied by China on nationwide safety grounds – a standoff that might result in roughly 270 companies being pressured to delist from American exchanges by 2024, in accordance with U.S. regulators.

“China will clarify classifications on info disclosure, and can probably slim the scope of main, confidential info,” one of many sources stated.

China hopes the deal may be reached this yr, and carried out subsequent yr, one other stated.

CSRC referred to official info launched by the Chinese language and U.S. regulators when replying to a question from Reuters on Friday.

On April 2, China revealed draft confidentiality guidelines that might doubtlessly give U.S. regulators entry to Chinese language companies’ working papers. In the meantime, the principles put the onus on Chinese language corporations to guard state secrets and techniques. learn extra

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Reporting by Jing Xu and Julie Zhu
Writing by Samuel Shen
Enhancing by John Stonestreet and Mark Potter

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