Chinese and American accounting audit cross-border law enforcement cooperation again take a substantive step

Absrtact: Following the signing of the memorandum of Law enforcement cooperation between the CSRC, the Ministry of Finance and the Accounting commission of the American Public Company (PCAOB), the Cross-border law-enforcement cooperation between China and the US has again taken substantive steps. It is reported that the SFC has completed a Sino-stock company's accounting bottom

Following the signing of the memorandum of cooperation between the CSRC, the Ministry of Finance and the Accounting commission of the Public company of the United States (PCAOB), the Cross-border law enforcement cooperation between China and the US has taken another substantive step.

It is reported that the SFC has completed a China-stock company's accounting manuscript finishing work and the completion of the relevant procedures, the United States has been informed that the U.S. side is ready to provide the SEC manuscript. At the same time, the CSRC is also prepared to provide PCAOB with accounting papers on the company.

This is the first time China Securities Regulatory Commission to the United States to provide relevant corporate accounting papers, marking the Sino-US accounting audit Cross-border Law enforcement cooperation has taken a substantial step and an important one.

In recent years, the United States has repeatedly targeted the Chinese companies, the company began to do the aerial summary of the wave, triggering a large area of selling shares, investors suffered losses, so that a group of stocks suspension or even privatization. Data show that, compared to the top 40 Chinese companies in the U.S. IPO peak period in 2010, less than two years, not only to the U.S. listed companies plummeted, some of the shares surged into a privatization retreat.

It is noteworthy that the short share of the stock was also brought to the attention of the SEC. Due to the inability to obtain the audit working papers of the relevant companies, the SEC sued the relevant accounting firms, leading to a renewed crisis of confidence among Chinese companies listed in the US.

Industry experts said that, according to the relevant laws and regulations of China, without the permission of the regulatory authorities, Chinese accounting firms may not be allowed to provide foreign financial statements abroad, must be through regulatory cooperation channels to provide.

In fact, the Sino-US Cross-border Law enforcement cooperation mechanism in the field of securities has maintained a good operation and the channels of regulatory cooperation are unimpeded. Last year, PCAOB sent a member to China to observe the inspection of CPA firms by the SFC and the Ministry of Finance, which is a good beginning for building mutual trust and a good foundation for the recovery of confidence in the future. Some of the stock's shares have now recovered.

May 7 This year, the SFC and the Ministry of Finance and PCAOB signed a memorandum of law enforcement cooperation, the formal implementation of Sino-US accounting audit Cross-border law enforcement cooperation. After the signing of the MOU, the CPA firm registered in the United States, if it involves a case needs to be transferred to the Chinese accounting papers, PCAOB can to the SFC and the Ministry of Finance and other requests, the Chinese side within a certain range, the implementation of relevant procedures, the United States can provide the corresponding accounting papers.

The CSRC and the U.S. regulatory authorities such as the SEC and PCAOB have maintained good relations of cooperation, the two sides from the overall situation of the relationship between China and the United States, the relevant issues related to the audit working papers on a number of rounds of consultations, and finally in this year's strategic economic Dialogue between China and the U.S. made a

The head of the relevant department of the SFC said that the external provision of audit papers to comply with China's relevant laws and regulations, including confidentiality law, archival law, accounting law, and so on, if used in the proceedings, but also to discuss the Ministry of Justice, Foreign Affairs and other relevant departments, as a kind of judicial cooperation The U.S. Securities and Futures Commission to provide audit working papers to launch the above-mentioned inter-ministerial consultation mechanism, the Ministry of Finance, Foreign Affairs, the Ministry of Justice and other relevant ministries of the results of cooperation.

The SFC has been fulfilling its commitments to join the International Securities and Futures Commission in its multilateral Memorandum of understanding, safeguarding market integrity, cracking down on crimes in the stock market and safeguarding the public image of listed companies abroad. Next, the United States and other relevant departments of the relevant requests, the implementation of the relevant procedures will be satisfied.

He also said that foreign regulators can through regulatory cooperation channels to the CSRC to submit investigation request, the current CSRC to provide accounting working papers, the United States to prosecute the five major accounting firms do not exist, the United States should properly deal with litigation issues. The unimpeded supervision cooperation channel, will effectively solve the Sino-US Accounting cross-border audit supervision of related disputes.

According to the introduction, the provision of accounting papers also shows the CSRC in the fight against the securities and futures market crime, safeguard market integrity, protect the interests of investors determination and confidence. The person in charge said that he hoped that the overseas regulatory agencies would also strictly fulfill their commitments, investigate and punish the institutions which are malicious short, effectively protect the legitimate rights and interests of the listed companies in the US and the investors, and properly handle the related issues of litigation. "The listed companies that are involved in financial fraud are dealt with according to law, but the good listed companies should also be clean, to maintain the good image of Chinese companies listed companies in the United States, to create a good environment for Chinese enterprises to list overseas." ”

He also stressed that the securities regulatory cooperation is an important part of Sino-US bilateral relations, and it is the trend of market development to solve the problems in cross-border supervision together with a cooperative attitude.