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ARTICLE · 12 SEPTEMBER 2022

U.S. And Chinese Regulators Sign Agreement On Access To Audit Materials

Jones Day
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On August 26, 2022, the PCAOB signed a Statement of Protocol with the CSRC and the Ministry of Finance of the PRC, forging a pathway for the PCAOB to fully inspect and investigate...

GlobalAccounting and Audit
Jones Day
Jones Day
Peter E. Devlin
Peter E. Devlin
Rory Hood
Rory Hood
Joelle Lau
Joelle Lau
Henry Klehm III
Henry Klehm III
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In Short

The Situation: The U.S. Public Company Accounting Oversight Board's ("PCAOB") ability to inspect and investigate PCAOB-registered public accounting firms in mainland China and Hong Kong was previously restricted by Chinese regulators. The U.S. Holding Foreign Companies Accountable Act ("HFCAA"), adopted in 2020, mandated that following three consecutive years of restricted access, companies audited by such firms would be subject to a trading prohibition in U.S. capital markets.

The Result: The PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission ("CSRC") and the Ministry of Finance of the People's Republic of China ("PRC"), establishing a framework for the PCAOB to conduct required inspections and investigations of China-based accounting firms.

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