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Exclusive | US regulators to meet Deloitte, EY in Hong Kong next week to prepare for summer inspections of audits of US-listed Chinese firms
- Executives of the Public Company Accounting Oversight Board will hold ‘preparatory meetings’ with the accounting giants ahead of inspections later in the year, sources say
- They will be trying to understand their internal controls and operations before assessing their auditing of Chinese companies listed in the US
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American accounting regulators will come to Hong Kong next week to hold “preparatory meetings” with Deloitte and EY ahead of inspections later in the year as they seek to assess their auditing of Chinese companies listed in the US, according to people familiar with the matter.
Executives of the Public Company Accounting Oversight Board (PCAOB) will meet senior management of the two accounting firms in an attempt to understand their internal controls and operations, three sources who did not wish to be identified told the Post.
The PCAOB will inform Deloitte and EY at a later stage which companies or new listings it wants to inspect, said one of the sources. The inspections will be conducted in the summer or September.
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“Hong Kong has been chosen by the PCAOB to do the inspection as their experience of the inspections last year was very good. China’s regulator also feels comfortable letting the audit working papers of mainland firms be passed on to Hong Kong for the PCAOB to do the inspection,” another source said.
Deloitte and EY declined to comment when contacted by the Post, while the PCAOB did not respond to inquiries.
The US watchdog said in December that it had been allowed to inspect the audit firms servicing mainland Chinese companies listed in the United States, removing the risk of delisting hanging over many of them at the time. It was the first time in China’s history that it had allowed audit records to be taken outside the mainland for inspection.
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