WASHINGTON (AFP) – A United States (US) watchdog said on Thursday that it secured “complete access” to inspect Chinese audit firms for the first time, temporarily easing delisting fears for many Chinese companies on American stock exchanges.
The Public Company Accounting Oversight Board’s announcement came amid worries that Chinese firms could be taken off US stock exchanges if they did not comply with audit requirements – a demand that places around 200 businesses at risk.
The statement marks a breakthrough in a longstanding dispute. Congress in 2020 passed a law targeting Chinese companies, under which the US audit watchdog must be able to inspect audits of foreign firms listed on US markets.
China has long cited national security and confidentiality concerns for denying foreign regulators access to local accounting firms.
“For the first time in history, the (board) has secured complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong,” the oversight board’s Chair Erica Williams said in a statement on Thursday.