The headquarters of the China Securities Regulatory Commission in Beijing File photo: VCG

 
China’s security regulator, China Securities Regulatory Commission (CSRC), has said that open dialogue and cooperation with the US Public Company Accounting Oversight Board (PCAOB) is the right approach, in response to US government’s proposal to raise listing thresholds and require all companies’ audits be reviewed by the PCAOB. 

Once in effect, the new measures will mean that Chinese companies audited by firms that cannot be reviewed by the PCAOB will face delisting from the US. 

CSRC said that it believed that in a globalized capital market, strengthening the supervision of information disclosure by listed companies and improving the professional ethics and practice quality of auditors are important means to protect the legitimate rights and interests of investors.

“It is the common responsibility of global securities regulatory agencies, which must be implemented by strengthening cross-border regulatory cooperation,” CSRC said, “that is why both sides should have open dialogue and cooperation based on common interest.”

According to the CSRC, the two sides have maintained communication and interaction. Since 2019, the Chinese regulatory authorities have repeatedly communicated with the US Securities Regulatory Commission (SEC) and PCAOB, and on August 4, 2020, the Chinese regulatory agency sent an updated proposal to PCAOB based on the latest needs and ideas of the US.

The Chinese securities regulators have so far provided the US securities regulators with audit papers for many Chinese companies listed in the US and the CSRC believe that the exchange of information such as audit papers should be conducted through supervisory cooperation channels, which is common practice in line with international standards.

Global Times