China

Five of China's largest state-owned companies announced plans to delist from U.S. exchanges as the two countries struggle to come to an agreement allowing American regulators to inspect audits of Chinese businesses.

Erica Williams is throwing cold water on a workaround that’s been floated as a way to avoid delisting of Chinese companies from U.S. stock exchanges.

Regulators from the two countries have been locked in negotiations over granting U.S. auditor watchdogs complete and open access to the audit work papers of about 200 Chinese companies.

The clock is ticking to avoid a 2024 deadline for kicking businesses off the NYSE and Nasdaq unless U.S. regulators get full access to inspect their audit work papers.

U.S. and Chinese officials have been negotiating for more than two years to ensure staff from the PCAOB can access the audit papers of Chinese companies traded in the U.S. 

Progress hinges in part over the scope of redactions in audit work papers of Chinese companies.

The board plans to hold a meeting next Wednesday with its reconstituted Investor Advisory Group, the first meeting in nearly four years with one of its biggest stakeholders.

Several hurdles remain in an impasse over audits on U.S.-listed Chinese companies to avoid forcing them off American exchanges as early as next year, an SEC official said.

Hong Kong’s accountant body said it failed to reach an accord to prolong an 11-year mutual recognition agreement with the U.S. amid a dispute over local qualifications.

U.S. regulators expanded the list of businesses that face possible expulsion from American exchanges because of Beijing’s refusal to allow access to the businesses’ audits.

The CSRC called for faster implementation of a new rule surrounding overseas listings that may remove a hurdle for U.S. regulators.

The revised draft rules deleted the requirement that on-site inspections should be mainly conducted by Chinese regulatory agencies or rely on their inspection results.

Chinese authorities are preparing to give U.S. regulators full access to auditing reports of the majority of the 200-plus companies listed in New York as soon as the middle of this year.

Gary Gensler signaled that only total compliance with U.S. audit inspections will allow the companies to keep trading on American markets.

The board said Thursday that it is still meeting with Chinese authorities to discuss the ability to inspect auditing firms in that country.

The board is reportedly making progress on talks with Chinese authorities on enabling access to inspections of local firms.

China and the U.S. should be able to reach an agreement on the auditing dispute, according to a senior executive at China’s top investment bank.

Signs of contagion are rippling through China’s property industry, with a spate of auditor resignations deepening concerns about developers’ financial health.

Almost three-quarters of inspections showing sub-par work, according to the watchdog.

The Public Company Accounting Oversight Board has proposed a rule for implementing a recent law that penalizes foreign companies whose auditing firms can’t be inspected by the PCAOB.