(Bloomberg) U.S. regulators and Chinese affiliates of the four largest accounting firms said they can probably reach an agreement within a few months to end a standoff over access to audit documents belonging to the firms’ clients.
Representatives of the U.S. Securities and Exchange Commission and the four firms said they don’t expect to need more than 70 additional days for settlement talks, according to an administrative order posted on the agency’s website.
Deloitte Touche Tohmatsu CPA Ltd., Ernst & Young Hua Ming LLP, KPMG Huazhen and PricewaterhouseCoopers Zhong Tian CPAs Ltd. are appealing an administrative judge’s January decision to bar them from leading audits of companies traded in the U.S. after failing to provide documents at the heart of accounting- fraud probes.
The SEC filed an administrative action against the auditors in 2012 after struggling for years to obtain information for dozens of probes of China-based companies.
After an agreement in May 2013 between the two countries allowed some information to be shared, the accounting firms argued, unsuccessfully, that the SEC was getting what it needed and that the case jeopardized the listings of hundreds of Chinese companies trading in the U.S.
The order on the SEC’s website says that the agency and firms agreed that “substantial progress already made towards settlement has increased significantly.” They said they expect their request for a 70-day extension of the administrative case to be their last.
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