Reuters reported that officials from the U.S. Public Company Accounting Oversight Board (PCAOB) are in China to finalize a dispute over the auditing compliance of the U.S.–listed Chinese firms.
PCAOB requests complete access to audit working papers of New York-listed Chinese entities stored in China. However, Beijing refused to let overseas regulators inspect local businesses’ financial audits on national security grounds.
Last December, SEC finalized rules to delist Chinese companies under the Holding Foreign Companies Accountable Act, which could put 273 companies at risk.
As of Friday, May 6, the SEC has added 128 Chinese companies to a list of firms facing possible U.S. stock delistings.
Amid the delisting loom, China has made concessions in recent months. According to Reuters, “China will make clear classifications on information disclosure, and will likely narrow the scope of major, confidential information.”
According to Reuters, in late March, CSRC asked some of the country’s U.S.–listed firms, including Alibaba Group Holding Ltd, Baidu Inc, and JD.com, to prepare for more audit disclosures. Late last month, Fang Xinghai, the CSRC’s vice chairman, said he expected a deal shortly.