China’s securities regulator has asked some US-listed Chinese companies and their audit firms to prepare for American inspections in Hong Kong, reported Reuters, citing sources familiar with the matter, as part of efforts to end a more than decade-old audit dispute.
The China Securities Regulatory Commission (CSRC) recently gave verbal notices to some audit companies, advising them to start preparing paperwork to move staff and documents to Hong Kong, the report said.
The Wall Street Journal had reported on Thursday that the US and China were close to an agreement allowing American accounting regulators to travel to Hong Kong to inspect audit records of New York-listed Chinese companies.
Chinese securities regulators are making arrangements for Chinese firms listed in New York and their accounting firms to transfer audit working papers and other data from mainland China to Hong Kong, the report said, citing people familiar with the matter. Regulators from the US Public Company Accounting Oversight Board (PCAOB) would then go to perform on-site inspections.
Beijing and Washington are in talks to resolve a long-running audit dispute which could result in Chinese companies being banned from US exchanges if China does not comply with Washington’s demand for complete access to the books of U.S.-listed Chinese companies.