Washington and Beijing have reached a landmark agreement that would allow US regulators access to audits of Chinese companies that are listed on American exchanges, in a deal that would halt the threatened delisting of about 200 stocks that trade on Wall Street, reports the Financial Times. The announcement by US and Chinese regulators is a breakthrough in a longstanding impasse. Beijing has not allowed foreign regulators to inspect Chinese company audits, citing a desire to protect state secrets. The US has said it will force Chinese companies to leave New York stock exchanges if they do not comply with US audit rules.
The Public Company Accounting Oversight Board, the US auditor watchdog, said on Friday it would have the power to select the companies, audit engagements and potential violations it inspects and investigates, without consulting Chinese authorities.
Under the deal signed by the PCAOB, the China Securities Regulatory Commission and China’s finance ministry, PCAOB inspectors could be on the ground in Hong Kong by mid-September to begin inspections, the agency said.