China and US regulators reach deal on auditors

After years of negotiations over US access to Chinese companies’ accounting documents, US and Chinese regulators announced a deal on Friday, Reuters reported. The non-binding agreement between the US Public Company Accounting and Oversight Board (PCAOB), the China Securities and Regulatory Commission (CSRC) and China’s Ministry of Finance grants US access only to documents in the enforcement of cases against auditors, not Chinese companies themselves. Neither does the deal allow US regulators to do on-the-ground inspections of auditors in China. “This is a step in the right direction,” said PCAOB Chairman James Doty, adding that the agreement does not replace the need for the PCAOB to inspect auditors in China.