The accounting regulator for public companies in the US said that it will not settle for less than «complete access» to audit papers, in yet another sign that Chinese firms listed in the country may have to face full compliance or delisting.
Despite continued dialogue with Chinese counterparts, The US is showing little willingness thus far to make concessions on access to audit documents with the Public Company Accounting Oversight Board (PCAOB) being the latest to reiterate the need for full compliance.
«Access to the US capital markets is a privilege. It's not a right. And the law is really clear that a part of those privileges comes with granting PCAOB complete access to the audit work papers of companies that are listed on the US markets,» according to a «Reuters» interview with PCAOB chair Erica Williams.
«If we aren't able to get complete access to audit working papers – no loopholes, no exceptions – all of the companies in China that are listed on US exchanges would have a trading prohibition in the US.»
Deadline Approaching
PCAOB will need to determine by the end of the year whether or not China has granted full audit access before the Securities and Exchange Commission makes a final call.
«While we need to get an agreement as soon as possible, we must be sure that we faithfully execute the law,» Williams said. «China knows what it needs to do. PCAOB inspectors are standing ready with the necessary resources for inspection.»
According to Williams, there are daily discussions with Chinese regulators, adding that she will not send over a team until there is «at least an agreement» before testing what works in practice.
