Updates On Audit Oversight Cooperation Between U.S. PCAOB And Chinese Authorities

The Statement of Protocol Agreement ("SOP")

On August 26, 2022, the U.S. Public Company Accounting Oversight Board (the PCAOB) announced a Statement of Protocol (the SOP) with the China Securities Regulatory Commission (the CSRC) and Ministry of Finance of China (MOF) in respect of cooperation on the oversight of PCAOB-registered public accounting firms based in mainland China and Hong Kong. This represents a first and meaningful move to address the decade-long audit oversight conflict between the PCAOB and regulators in the People's Republic of China (the PRC). Gary Gensler, the Chair of U.S. Securities and Exchange Commission (the SEC), said, "This agreement marks the first time we have received such detailed and specific commitments from China that they would allow PCAOB inspections and investigations meeting U.S. standards."¹ In response to reporters' questions, a CSRC official stated that "[t]he China-U.S. audit oversight cooperation agreement is an important