PwC Hong Kong and KPMG China are the first accounting firms that will help a US regulator carry out inspections of the audit work of US-listed mainland companies, part of a historic process that aims to head off mass delisting of Chinese companies from US exchanges, reports the South China Morning Post. The two firms have received notice that the Public Company Accounting Oversight Board (PCAOB) picked them for inspections of several of their audit clients, according to two sources familiar with the situation.
Inspectors from PCAOB have not yet arrived in the city but are expected soon. They will serve the required three-day hotel quarantine before they begin work at the Hong Kong offices of the accounting firms, the sources added.
The two firms have already prepared the paper and electronic audit materials to be made available. All the records would have already been archived according to PCAOB standards, while auditors stand ready to be interviewed by the inspectors upon request, the sources said.