Under new US rules the Public Company Accounting Oversight Board (PCAOB), the main U.S. audit regulator will start this year to inspect Chinese firms listed at US stock markets in China, Reuters reports. Accounting professor Paul Gillis is not impressed.
The PCAOB has been seeking access to China for audit inspections for years, following a rash of botched audits that led to massive losses for investors in Chinese shares in the United States. China had balked at granting access for audit inspectors, citing sovereignty concerns.
Under U.S. law, auditors that check the books of U.S.-listed companies must be registered with the PCAOB and open to inspections.
“They’ve gotten very little here, but they’re making progress,” said Paul Gillis, an accounting professor at Peking University in Beijing.
“The whole issue is becoming less relevant as these companies flee the U.S. markets to return to China, and that’s really the best for all parties,” he said.
Chinese companies have been pulling out of the United States and returning home, where share prices had surged before a recent pullback. In the media and internet sectors alone, 17 U.S.-listed Chinese companies have said this year they will go private, spurred by a chance to re-list on Chinese exchanges, according to a report on Monday from Mizuho Securities.
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