SEC & PCAOB Meet Again with Chinese Finance Leaders

The Wall Street Journal has reported that there was another meeting between "a delegation of Chinese officials" and the SEC on January 11 and the PCAOB was also slated to meet with them a few days later. As we know, there is an ongoing discussion between the two countries regarding how to oversee Chinese based accounting firms that are registered with the US Public Company Accounting Oversight Board (PCAOB) to perform audits of US public companies.

The PCAOB feels strongly that it needs to be able to audit these accounting firms as it does everywhere else in the world. Until now, the Chinese regulators have been stating that to do so would violate various Chinese privacy laws. Indeed, Deloitte's China folks have refused to respond to subpoenas in the Longtop Financial alleged fraud case for this reason.

The last planned meeting was put off, which was not a good sign. Now that the parties are meeting again, one would think this is better than not meeting.  Our regulators are getting a lot of heat from the US Congress to bring this issue to a head. Hopefully the parties can work to do so without anyone losing theirs.

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