US and Chinese officials will meet next week to discuss giving US securities regulators the ability to investigate companies within China, Bloomberg reported, citing two unnamed Chinese officials with direct knowledge of the plans. Representatives from the Public Company Accounting Oversight Board (PCAOB) and the Securities and Exchange Commission (SEC) are set to discuss the issue with counterparts from the China Securities Regulatory Commission (CSRC) in Beijing on July 11-12. A PCAOB spokesperson said that the two sides will share practical information regarding auditor inspection that should result in a “meaningful inspection procedure for Chinese audit firms going forward.” This might entail allowing US regulators to conduct field inspections of companies in China that are listing or intending to list in the US, and of the accounting firms that audit them. PCAOB Chairman James R. Doty said in April that the inability to verify mainland auditor’s work represented a “gaping hole in investor protection.”
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