Certain audit documents of U.S.-listed Chinese companies will finally be handed over to U.S. regulators by the Chinese government, according to news reports.
"China's securities regulator announced that it will begin providing certain requested audit work papers to our market regulators, an important step towards resolving a long-standing impasse on enforcement cooperation related to companies that are listed in the United States," says U.S. Treasury Secretary Jack Lew in a statement issued to the press.
More than 100 Chinese companies traded in the U.S. have faced questions over their accounting and disclosure. Many of the companies in question have seen their auditors resign. In some cases, the SEC and U.S. exchanges have delisted or deregistered the companies with accounting irregularities.
The Wall Street Journal reports that the documents will be provided to the Securities and Exchange Commission and the Public Company Accounting Oversight Board, which oversees the U.S. audit industry.
The SEC has long been trying to obtain audit documents of U.S.-listed Chinese companies. Audit firms haven't been cooperative as they fear facing harsh penalty from the Chinese government as Chinese law treats such documents as state secrets.