US, China Expect to Reach Agreement on Audit Inspection Mechanism in Coming Months

U.S. and Chinese regulators are expected to reach an agreement, in the coming months, on a set of protocols that would allow the inspection of Chinese accounting firms that audit Chinese companies that trade on U.S. markets.

Chinese companies have been questioned about their accounting or disclosure practices in the past few years which has led the U.S. to investigate. But China has blocked U.S. inspectors from entering the country, citing concerns over sovereignty. The U.S. says the inspections are needed to protect the interests of its investors.

The Wall Street Journal reports that the two sides "have made significant progress toward working out a way for the U.S. to inspect the work of Chinese audit firms."

"We continue to work out the details of such cooperation and expect the two sides to be able to reach agreement on a set of protocols in the coming months," James Doty, chairman of the Public Company Accounting Oversight Board, told the Journal.

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