Sino-Stock audit turnaround: "Four" and the SEC negotiated and reconciled

A Monday document by the SEC revealed that Chinese members of PwC, Ernst, Deloitte and KPMG are consulting with US securities regulators about a possible settlement agreement, which gives the firm and SEC law enforcement officials a 90-day grace period to file an appeal, will help the two sides finally reach a settlement.

The SEC document, received by the daily economic news reporter, also shows that SEC law enforcement has agreed to the extension on behalf of UOB.

In fact, the main purpose of the extension is to ease the previous fierce conflict between the two sides, this January, an SEC judge ruled that Chinese members of four big accounting firms should suspend U.S. operations for 6 months because the companies "deliberately" did not provide audit documents when U.S. regulators investigated Chinese corporate accounting fraud.

After the relevant ruling has occurred, the above-mentioned members have appealed to this effect and have been able to suspend the 6-month suspension of operations, but if the decision is finally implemented, the result would be disastrous, as it would directly result in the fact that many Chinese companies listed in the US do not have the audit earnings of the CPA firms, At the same time, some multinational companies engaged in the Chinese business of the four audit firms will also be affected.

May 10, the SEC said it agreed to listen to four major accounting firms in their own China business, because of the refusal to submit to the SEC Audit client working papers to be penalized for the decision to appeal.

China and the United States regulatory turmoil, in 2010, the south-east intermediation fraud as a landmark incident in the fraud, caused by the U.S. regulatory level, the SEC then strengthened the overseas listed companies, especially through the reverse takeover of Chinese companies to investigate; 2011, sec Two summons Deloitte Shanghai, Requiring the latter to provide documents related to the alleged financial fraud in southeastern China, Deloitte said the Chinese Secrecy Act did not allow it to submit the relevant information to the SEC, which led the SEC to formally sue Deloitte Shanghai branch in May 2012 to escalate the crisis.

On the outcome of the settlement, Song Yixin, a partner at the Shanghai New Hope Tatsu law firm, told the Daily economic news reporter that the SEC's latest document does not necessarily mean a substantial turnaround, possibly because the four accounting firms ' appeals made the previous ruling not effective, and now apply for an extension because of fears that the ruling will have a A revaluation is required.