For The First Time In History, US Is Granted Full Access To Investigate CCP Firms

It was reported on December 15th, the U.S. Public Company Accounting Oversight Board (PCAOB) claimed that under the Holding Foreign Companies Accountable Act passed by Congress, it has gotten full access to inspect and investigate firms in China for the first time in history, in order to deal with potential problems. The report said the CCP regime had prevented the watchdog from inspecting and investigating accounting firms in mainland China and Hong Kong. Till this August, US and the CCP reached a deal to settle a long-running dispute over auditing compliance of US-listed CCP firms. The deal granted PCAOB full access to the CCP audit working papers with no redactions, the right to take testimony from audit company staff in Communist China and sole discretion to select what companies it inspects.

PCAOB selected two firms for this inspection: KPMG Huazhen LLP in Communist China and PricewaterhouseCoopers in Hong Kong. Under the inspection, staff in PCAOB have identified numerous potential deficiencies. The full inspection report will be finalized and released in the next year. Due to PCAOB’s full inspection, the US Stock Exchange reseted a three-year clock for the CCP firm’s compliance, which temporarily removed the risk of 200 CCP companies being kicked off the US Stock Exchange. Although most US-listed CCP firms’ trading got higher amid the news, some ended sharply lower. Alibaba, JD.com, and Baidu were down between 3-5% while Tencent Music was down 3.5%. These giant US-listed CCP firms were down more than the broader market where the S&P 500 Index was down 2.5%.