The China Securities Regulatory Commission (CSRC) said Friday that it welcomes the decision by the US Public Company Accounting Oversight Board (PCAOB) to vacate its previous determinations based on professional and regulatory considerations, and looks forward to building on previous experience and carrying out audit oversight cooperation with its US counterparts in the years to come.

File photo: Xinhua

The PCAOB on Thursday issued a report confirming that it was able to completely inspect and investigate the accounting firms headquartered in the Chinese mainland and the Hong Kong SAR in 2022, thus vacating its determinations made in 2021.

This announcement, showing good progress in China-US audit oversight cooperation, is widely seen by the market as a positive signal for Chinese companies listed or seeking listings in the US market.

“The practice has proven that a practical path for cooperation that accommodates the legal and regulatory requirements in both jurisdictions can certainly be found, as long as both sides work together with mutual respect, professionalism, and pragmatism,” said the CSRC in a statement published on its website on Friday commenting on the PCAOB’s latest move.

The CSRC and the Ministry of Finance signed an audit oversight cooperation agreement with the US PCAOB on August 26 this year to bring the inspections and investigations of accounting firms under a bilateral cooperation framework.

Regulators from both sides have since then acted in strict accordance with the legal and regulatory requirements of their respective jurisdictions and reached a consensus in the agreement, and worked together efficiently and effectively on a number of field inspections and investigations, yielding good progress, said the CSRC.

During the cooperation efforts, both sides set up inspections and investigation plans thorough communication and coordination. The US regulator accessed audit documentation including audit work papers through the Chinese regulator, and conducted interviews and took testimony of related personnel of the accounting firms with the participation and assistance of the Chinese side, the CSRC added.

“Information security requirements in applicable laws were met as regulators from both sides fulfilled their statutory regulatory mandates,” it added.
“We look forward to building on previous experience and carrying out audit oversight cooperation with our US counterparts in the years to come with enhanced mutual respect and trust, thus establishing long-term and sustainable cooperation arrangements that will enhance the stability and predictability of international regulatory environment and better protect global investors,” said the CSRC.