Monday, May 23

China, US expected to reach consensus soon in audit talks -sources


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SHANGHAI — Discussions between Chinese and US regulators over cooperation on audit and regulation are proceeding smoothly, two sources with direct knowledge of the talks told Reuters on Friday, after a warning by the US over some Chinese companies.

The US Securities and Exchange Commission (SEC) this week identified five Chinese firms that will be delisted if they do not provide access to audit documents.

Washington wants complete access to the books of US-listed Chinese companies, but Beijing bars foreign inspection by local accounting firms, leading to a stand-off with hundreds of billions of dollars of US investments at stake.

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The SEC said in December it had identified a total of 273 companies that were at risk, but had not disclosed any names.

Its move this week sent shares in Chinese companies, especially in tech, tumbling in the US and China.

On Friday, the two sources said consultations were moving “relatively smoothly,” with one saying that a consensus on audit and regulatory cooperation is expected “as soon as possible.”

“Although there were some different views on auditing standards before, it is still moving forward in a positive way,” the second source said, adding: “The next step for both parties is to continue to advance in depth on more details.”

Both declined to be named, citing the sensitivity of talks.

China’s securities regulator said earlier on Friday that it was confident it will reach an agreement with its US counterparts.

Talks between the China Securities Regulatory Commission (CSRC), the Chinese finance ministry and the US Public Company Accounting Oversight Board had made “positive progress,” the CSRC said on its official WeChat account. (Reporting by Shanghai and Beijing Newsrooms; Editing by Clarence Fernandez and Alexander Smith)



financialpost.com