US sees "breakthrough" in auditing China

US regulators have completed a initial round of auditing observations in China, an important step toward regulating Chinese firms listed in the US, Reuters reported. Talks between Chinese and US officials also concluded talks on audit documents, an integral aspect of the auditor regulation process. James Doty, chairman of the Public Company Accounting Oversight Board (PCAOB) said the upcoming talks could result in a “major breakthrough,” although obstacles remain. “The fact that it is a serious discussion with decision makers who are aware of the complexities of the issues on both sides is new,” he said. The PCAOB was formed by Congress ten years ago to monitor the auditing industry following a series of US corporate scandals, namely Enron. In recent years, the board has tried to expand its policing to US corporations listed overseas, but has struggled to monitor China. A string of fraud cases has plagued US-listed Chinese companies since 2010, and Chinese regulators have been weary to allow the US a peek into its auditing books.