From WSJ - China and U.S. reach a Pact on seeing audit records!
The U.S. and China have struck an agreement giving U.S. accounting regulators access to documents from Chinese accounting firms.
The deal, expected to be announced Friday, could help U.S. regulators investigate the auditors of U.S.-listed Chinese companies that might have been involved in accounting fraud.
The agreement will allow the U.S. Public Company Accounting Oversight Board to see audit records and other documents held by Chinese audit firms. The China Securities Regulatory Commission and China's Ministry of Finance will help the PCAOB obtain the documents.
More than 100 Chinese companies listed in the U.S. have faced questions about their accounting and disclosure from regulators, auditors and short-sellers, and investors lost billions of dollars when those companies' shares plunged.
"This is a step in the interests of protecting investors," PCAOB Chairman James Doty said.
The agreement doesn't address or resolve a similar but separate dispute in which the Securities and Exchange Commission is demanding access to documents from Chinese audit firms, as it, too, probes possible fraud. Nor does the agreement allow the PCAOB into China for inspections of Chinese firms that audit U.S.-traded companies, which the U.S. regulator has pushed for.
Still, Mr. Doty said the agreement is a first step toward resolving those issues. It demonstrates that the Chinese are modifying their position on cooperating with U.S. regulators, he said, and "one could only regard it as encouraging."
Chinese regulators, in a draft of their statement, call the pact "a significant step in China-U.S. audit oversight [and] cross-border enforcement cooperation."
This Pact is the best way for Delaware court to get to an agreement and/or use this Pact to request all audit records from 2009 till now from China. This audit records are the best way to find out how much our shares really are. I would like to request someone inform this information to the necessary people. Delaware court has to be aware of this new Pact as an option.