U.S, and China sign audit deal

China has agreed to allow U.S. regulators audit accounting firms in China and Hong Kong, allaying fears that 200 companies, including Alibaba Group, JD.Com Inc and others, will be barred from trading on U.S. exchanges.

The agreement will calm the US-China feud and give China access to the world’s deepest capital markets.

U.S. officials note that their assessment of China’s compliance will be reviewed if they conduct unfettered audits of accounting firms, as promised.

PCAOB, the Public Company Accounting Oversight Board, which oversees audits of publicly traded companies in the United States, said the agreement is the most detailed they have ever reached with China. China Securities Regulatory Commission (CSRC) said the agreement was significant for all parties.

Since the news broke, major Chinese companies listed in the United States rose 2.6 per cent in early trading, Pinduoduo (PDD.O) up nearly 6 per cent, and Baidu Inc by 3.3 per cent. Now, China-based U.S. issuers have a combined market capitalization of between US$1 trillion and US$2 trillion.

Lynn Martin, president of the New York Stock Exchange, said the agreement was an important development for the global economy, while Kai Zhan, a senior Chinese lawyer, said the agreement showed both sides had a strong will to resolve the issue.

The sources for this piece include an article in Reuters.

IT World Canada Staff
IT World Canada Staff
The online resource for Canadian Information Technology professionals.

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