US regulator nearing deal to observe Chinese audits

The US auditing authority announced that it is nearing a deal to observe Chinese audit inspections of US-listed Chinese companies, Reuters reported. The US Public Company Accounting Oversight Board, an independent watchdog established by Congress to oversee auditors, would be allowed to observe Chinese officials as they review audits. The US has previously been shut out of on-the-ground audits in China due to national sovereignty concerns. The breakthrough in talks came when US officials visited last week. “There’s every reason to believe we could do the observations in the fall, possibly even the summer,” PCAOB chairman Jim Doty said. Observation is an important step toward full joint inspections, which is the PCAOB’s ultimate goal, Doty said. The US Securities and Exchange Commission is currently investigating improper accounting at several Chinese companies listed in the US.