Washington, D.C., July 6, 2011
The Public Company Accounting Oversight Board announced today that a joint PCAOB and Securities and Exchange Commission delegation will meet next week in Beijing with representatives of China's Ministry of Finance and the China Securities Regulatory Commission.
"This meeting is the commencement of our accelerated efforts with the People's Republic of China to forge a cooperative resolution to cross-border auditing oversight. I believe we share a common objective with Chinese regulators to protect investors and safeguard audit quality through our mutual cooperation," said James R. Doty, PCAOB Chairman.
The delegation will be led by Board Member Lewis H. Ferguson and include staff from the PCAOB's Office of International Affairs and Division of Registration and Inspections, and the SEC Office of International Affairs and Office of the Chief Accountant. The delegation will meet with senior leadership of the Ministry of Finance and the CSRC.
"The purpose of this meeting is to provide an opportunity to exchange information about how each country conducts inspections of auditing firms and to move toward a bilateral agreement providing for joint inspections of China-based auditing firms registered with the PCAOB," said PCAOB Board Member Ferguson.
Since 2007, the Board has engaged in discussions with its Chinese counterparts regarding a bilateral agreement that would enable the PCAOB to conduct inspections of auditing firms in China.
Recently, the PCAOB has renewed efforts to reach an agreement that would accomplish this objective. The Board is hopeful that a resolution to this matter can be achieved in the near term. To this end, both the PCAOB and Chinese authorities have committed to accelerating their efforts to reach an agreement on cross-border oversight cooperation.
The Sarbanes-Oxley Act of 2002 requires that all public companies whose securities trade on U.S. exchanges must use an audit firm that is registered with the PCAOB, regardless of where the public company and the audit firm are located. To date, the PCAOB has been blocked from conducting inspections of auditing firms in China due to sovereignty concerns raised by Chinese regulators.
Currently, PCAOB registrants include more than 900 non-U.S. auditing firms from 87 jurisdictions, including 110 firms in China and Hong Kong.