Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Thursday, Mar 23, 2023

US regulators to visit Hong Kong for fresh round of audit inspections: sources

US regulators to visit Hong Kong for fresh round of audit inspections: sources

Officials from the U.S. audit watchdog will start a new round of inspections in Hong Kong on Chinese companies' auditors as soon as next week, sources said, as part of a deal with Beijing to prevent delistings of the firms from the New York bourse.
For the upcoming inspection, the U.S. Public Company Accounting Oversight Board (PCAOB) has picked branches of EY, Deloitte, PricewaterhouseCoopers and some other audit firms in both Hong Kong and mainland China, one of the sources said.

A group of Chinese officials will be dispatched by the China Securities Regulatory Commission (CSRC) and the Ministry of Finance (MOF) to assist the inspection in Hong Kong, the second source said.

U.S. regulators last year spent weeks reviewing auditors' work in Hong Kong, then in December said they had obtained full inspection access, removing the immediate risk that around 200 Chinese companies could be booted off U.S. stock exchanges.

That visit came after U.S. and China reached a landmark deal last August to settle a long-running dispute over auditing compliance of U.S.-listed Chinese firms. Authorities in China have long been reluctant to let overseas regulators inspect local accounting firms, citing national security concerns.

For the upcoming reviews, officials from both sides will follow a protocol similar to last year's onsite inspection in Hong Kong, said the sources, who were not authorized to speak to media and declined to be identified.

A spokesperson for the PCAOB, which oversees registered public accounting firms around the world, declined to comment for this story, noting the board does not comment on ongoing inspections.

The China Securities Regulatory Commission, the Ministry of Finance, EY, Deloitte, and PwC did not immediately respond to Reuters' queries.

The PCAOB said in December it had full access to inspect and investigate New York-listed Chinese companies for the first time ever, after conducting an onsite inspection in Hong Kong that looked into the audits of the selected companies.

The regulator then said the teams had been making plans to resume regular inspections and investigations in China in early 2023 and beyond.

It also warned that any obstruction of inspection access could affect Chinese firms' listings in the U.S.

Under the PCAOB's inspection guidelines, in general, each auditing firm is subject to inspection either annually, if the firm provides audit opinions for more than 100 issuers, or otherwise once every three years, said Jessica Zhou, partner at law firm White & Case, based in Hong Kong.

"In light of the PCAOB's recent, successful completion of its inspections of selected firms in Hong Kong, there is reason to be optimistic that the additional inspections will similarly be carried out in accordance with the agreement," she said, referring to the deal reached last year.

A mainland branch under KPMG and a Hong Kong branch under PwC were picked by the PCAOB in last year's inspections, the PCAOB said earlier.

PCAOB staff identified "numerous potential deficiencies" in their inspection work last year, and inspection reports will be finalized and made public this year, the regulator said earlier.
Newsletter

Related Articles

Hong Kong News
Close
0:00
0:00
NYPD is setting up barricades outside Manhattan Criminal Court ahead of Trump arrest.
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
Goldman Sachs cuts outlook for European bank debt over Credit Suisse crisis
Paris Rioting vs Macron anti democratic law
'Sexual Fantasy' Assignment At US School Outrages Parents
The US government has charged Chinese businessman Guo Wengui with leading a $1 billion fraud scheme that cheated thousands of followers out of their money.
Credit Suisse to borrow $54 billion from Swiss central bank
The BBC problem about China
Russian Hackers Preparing New Cyber Assault Against Ukraine
"Will Fly Wherever International Law Allows": US Warns Russia After Drone Incident
If this was in Tehran, Moscow or Hong Kong
Announcing GPT-4
TRUMP: "Standing before you today, I am the only candidate who can make this promise: I will prevent World War III."
China is calling out the US, UK, and Australia on their submarine pact, claiming they are going further down a dangerous road
A brief banking situation report
We are witnessing widespread bank fails and the president just gave a 5 min speech then walked off camera.
Donald Trump's asked by Tucker Carlson question on if the U.S. should support regime change in Russia?.
'No relation to the American SVB': India's SVC Bank acts to calm depositors amid brand name confusion.
Good news: The U.S. government is now guaranteeing all deposits, held by, Silicon Valley Bank, and the funds are available as of today
Silicon Valley Bank exec was Lehman Brothers CFO
In a potential last-ditch effort, HSBC is considering a rescue deal to save Silicon Valley Bank UK from insolvency
Saudi Arabia has announced a major breakthrough in diplomacy with Iran after two years of intense talks
Elon Musk Is Planning To Build A Town In Texas For His Employees
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
City officials in Berlin announced on Thursday that all swimmers at public pools will soon be allowed to swim topless
Fitness scam
Market Chaos as USDC Loses Peg to USD after $3.3 Billion Reserves Held by Silicon Valley Bank Closed.
A primitive judge in Australia sparked outrage when he told a breastfeeding woman to leave his courtroom for being “a distraction"
Barcelona is feeling the heat as they face corruption charges over payments to former vice-president of Spain's referees' committee, Jose Maria Enriquez Negreira
Banking regulators close SVB, the largest bank failure since the financial crisis
Silicon Valley Bank: Struggles Threaten Tech Startup Ecosystem"
The unelected UK Prime Minister Rishi Sunak, an immigrant himself, defends new controversial crackdown on illegal migration
Old clip of Bill Gates saying Ukraine is a big, fat, corrupt sinkhole is going viral
Man’s penis amputated by mistake after he’s wrongly diagnosed with a tumour
2 universities in Hong Kong embrace use of ChatGPT, other AI tools
In a major snub to Downing Street's Silicon Valley dreams, UK chip giant Arm has dealt a serious blow to the government's economic strategy by opting for a US listing
Missing Chinese banker was working to set up Singapore family office
Hong Kong ditches Covid mask mandate after 945 days
Xi Jinping and His Wife Meet with Cambodian King Norodom Sihamoni and Queen Mother Norodom Monineath Sihanouk
How do stolen goods end up on Amazon, eBay and Facebook Marketplace?
It's the question on everyone's lips: could a four-day workweek be the future of employment?
Is Gold the Ultimate Safe Haven Asset in Times of Uncertainty?
Spain officials quit over trains that were too wide for tunnels...
Hello. Here is our news digest from London.
Corruption and Influence Buying Uncovered in International Mainstream Media: Investigation Reveals Growing Disinformation Mercenaries
When it comes to Tesla vs Lamborghini, an empty vessel makes more noise
European MP Clare Daly condemns US attack on Nord Stream
Former U.S. President Carter will spend his remaining time at home and receive hospice care instead of medication
North Korea test-fires an intercontinental ballistic missile into the Sea of Japan west of Hokkaido
US bombed Nord Stream gas pipelines, claims investigative journalist Seymour Hersh
×