"US and China Near Agreement Allowing US Accounting Oversight of Chinese Companies Listed in New York"

[Asia Economy New York=Special Correspondent Joselgina] Reports have emerged that the United States and China are close to reaching an agreement on the accounting supervision rights of Chinese companies listed on the New York Stock Exchange.

The daily Wall Street Journal (WSJ) reported on the 25th (local time), citing sources familiar with the matter.

Accordingly, Chinese securities authorities plan to allow their companies listed in the U.S. and their accounting firms to send audit reports and other data from the mainland to Hong Kong. Subsequently, auditors from the U.S. Public Company Accounting Oversight Board (PCAOB) will visit Hong Kong to conduct on-site audits of Chinese companies' records.

The China Securities Regulatory Commission recently informed several Chinese companies and accounting firms of this plan, stating that PCAOB auditors from the U.S. are expected to arrive in Hong Kong as early as next month.

Sources evaluated that "a final agreement can only be reached if the U.S. determines that it has full access to the audit reports of Chinese companies."

If an agreement is reached, the long-standing conflict between the U.S. and China over the accounting supervision rights of Chinese companies listed on the New York Stock Exchange is expected to be resolved. Until now, the U.S. has demanded that the PCAOB directly audit the accounts of Chinese companies listed in the U.S. On the other hand, China has prevented its companies from directly responding to U.S. audits citing national sovereignty and security. In response, the U.S. introduced the Foreign Company Accountability Act at the end of 2020, allowing the delisting of foreign companies that fail to meet U.S. accounting standards for three consecutive years, continuing the conflict.

If no agreement on accounting supervision between the U.S. and China is reached, more than 200 Chinese companies including Alibaba, Baidu, and Jingdong could be delisted from the New York Stock Exchange starting early 2024.

This content was produced with the assistance of AI translation services.