Editorial | Hong Kong shows its worth as accounting turns into geopolitical pawn
- US auditing in city of Chinese firms facing delisting from New York exchange passes first test, but there is still some way to go
For now, their risk of being delisted has been reduced, but not eliminated. Hopefully, the next auditing phase will be as smooth as the first.
For the first time, Beijing allowed audit papers to be taken from the mainland for inspection.
Hundreds of US-listed Chinese firms had faced delisting from the New York exchange if US regulators were not allowed audit access.
The Chinese securities regulator hailed the result as a breakthrough, but at least one US politician who sponsored the law that began the whole kerfuffle has vowed that his effort to kick the firms off the New York exchange is “not over”.
Two teams of PCAOB inspectors spent seven weeks in Hong Kong at the offices of PwC and KPMG working through hundreds of audit papers from a sample of China-domiciled companies whose shares are traded in New York.