{"id":1778885,"date":"2022-12-18T06:00:03","date_gmt":"2022-12-18T11:00:03","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1778885"},"modified":"2022-12-18T06:03:27","modified_gmt":"2022-12-18T11:03:27","slug":"chinese-companies-submit-to-u-s-audit-watchdog-inspection-avert-delisting-threat-for-now","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/chinese-companies-submit-to-u-s-audit-watchdog-inspection-avert-delisting-threat-for-now\/","title":{"rendered":"Chinese Companies Submit to U.S. Audit Watchdog Inspection, Avert Delisting Threat for Now"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fchinese-companies-submit-to-u-s-audit-watchdog-inspection-avert-delisting-threat-for-now%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1778885&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The Public Company Accounting Oversight Board (PCAOB), accounting watchdog in the United States, has received full access to inspect and investigate companies operating in China for the first-ever time. The PCAOB is also tasked with overseeing registered public accounting firms worldwide.<\/p>\n<p>The PCAOB had the sole discretion to select which firms to audit, the potential violations it looked into, and also audit engagements without having any input or influence from Chinese authorities. Staff at the accounting watchdog selected two companies for inspection: PricewaterhouseCoopers in Hong Kong and KPMG Huazhen LLP in mainland China. The firms were selected using the same methodology that is usually applied in PCAOB inspections.<\/p>\n<p>Inspectors from the PCAOB were able to view complete audit work papers without any redactions, and the agency was able to retain critical information to finish the work. The PCAOB was also able to interview and take testimony of all individuals linked to the audits which the agency inspected or investigated.<\/p>\n<p>The \u201chistoric and unprecedented access\u201d has only been possible due to the Congress passing the Holding Foreign Companies Accountable Act (HFCAA) through which a \u201cclear message\u201d was sent that access to U.S. capital is a \u201cprivilege and not a right,\u201d said PCAOB Chair Erica Williams, according to a\u00a0<a href=\"https:\/\/pcaobus.org\/news-events\/news-releases\/news-release-detail\/pcaob-secures-complete-access-to-inspect-investigate-chinese-firms-for-first-time-in-history\">news release<\/a>\u00a0on Dec. 15.<\/p>\n<p>\u201cThis is the beginning of our work to inspect and investigate firms in China, not the end. The PCAOB is continuing to demand complete access in mainland China and Hong Kong moving forward,\u201d she said.<\/p>\n<p>\u201cOur teams are already making plans to resume regular inspections in early 2023 and beyond, as well as continuing to pursue investigations.\u201d<\/p>\n<h2>Delisting Issues<\/h2>\n<p>By granting the PCAOB access to inspect and investigate firms in China, the possibility of roughly 200 Chinese firms getting removed from U.S. stock exchanges has eased.<\/p>\n<p>\u201cThis falls into the category of a game-changing view of Chinese companies because the threat of their <a href=\"https:\/\/www.theepochtimes.com\/t-delisting\">delisting<\/a> seems to have been eliminated,\u201d Art Hogan, chief market strategist at B. Riley Financial, <a href=\"https:\/\/www.reuters.com\/business\/us-pcaob-says-is-able-inspect-firms-china-first-time-2022-12-15\/\">said<\/a> to Reuters.<\/p>\n<p>In 2020, U.S. lawmakers had agreed on legislation that would kick out Chinese companies from American stock exchanges unless they adhere to U.S. auditing standards.<\/p>\n<p>Last year, the PCAOB complained that Chinese authorities prevented the oversight board from inspecting and investigating in China and Hong Kong. In August this year, Washington and Beijing reached a deal to resolve the dispute.<\/p>\n<h2>Uncovering Information<\/h2>\n<p>Some have raised concerns about the information the audits might uncover. While speaking to Reuters, Tim Ghriskey, senior portfolio strategist at Ingalls &#038; Snyder, said that the agreement takes one of the risks \u201coff the table\u201d when it comes to investing in Chinese firms.<\/p>\n<p>However, issues identified due to the more strict accounting oversight \u201ccould be very bad for the sector, especially if there is then no effort to correct it or come clean,\u201d he said.<\/p>\n<p>According to the PCAOB release, Williams admitted that the agency staff had identified \u201cnumerous potential deficiencies\u201d in their inspection work. The reports are expected to be finalized and published next year.<\/p>\n<p>Calling the deficiencies \u201ctroubling,\u201d Williams said that this was not an unexpected development considering that the jurisdiction is being inspected for the first time.<\/p>\n<p>\u201cThe fact that we found those potential deficiencies is a sign that the inspection process worked as it is supposed to,\u201d he said.<\/p>\n<p>\u201cThis is exactly why Congress passed the HFCAA in the first place\u2014so we could open up the books, identify potential problems, and begin the work of holding firms accountable to fix them. And that is exactly what we intend to do.\u201d<\/p>\n<p>Williams added that the PCAOB\u2019s agreement with Beijing should not be misconstrued as a \u201cclean bill of health\u201d for firms in mainland China and Hong Kong.<\/p>\n<div class=\"author_wrapper\">\n<div class=\"one_author_block round\">\n<div class=\"top_row\">\n\t\t\t\t\t<a href=\"https:\/\/www.theepochtimes.com\/author-naveen-athrappully\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/10\/NaveenAthrappully.jpg\" alt=\"Naveen Athrappully\"   style=\"display:none\"><\/a>\n\t\t\t\t\t<\/div>\n<p>Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.\n<\/p>\n<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Public Company Accounting Oversight Board (PCAOB), accounting watchdog in the United States, has received full access to inspect and investigate companies operating in China for the first-ever time. The<\/p>\n","protected":false},"author":1,"featured_media":1695609,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[4261,8604,5458,4117,6997,9979,9978,3819,8361,4104,7238,6056],"class_list":["post-1778885","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report","tag-audit","tag-avert","tag-bongino","tag-chinese","tag-companies","tag-delisting","tag-inspection","tag-report","tag-submit","tag-threat","tag-u-s","tag-watchdog"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1778885","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1778885"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1778885\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1695609"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1778885"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1778885"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1778885"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}