Long Awaited Agreement is Only a First Step

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According to Thomson Reuters, the U.S. Public Company Accounting Oversight Board (PCAOB) on Aug. 26, 2022, finally signed an agreement with Chinese authorities that will allow the board to inspect and investigate audit firms based in China and Hong Kong whose clients trade on American exchanges.

Questions:

  1. When will the PCAOB start inspections?
  2. What were the legislative provisions that helped the PCAOB seal the deal?
  3. What are some of the reasons why China has so far not granted full access to audit papers?
  4. What fraud, mentioned in the article, cost a lot of money for U.S. investors?

Source:

Ho, S. (2022) U.S. and China Sign Historic Agreement on Audit Firm Supervision. Thomson Reuters Tax and Accounting News, Aug. 29 (Retrievable online at https://tax.thomsonreuters.com/news/u-s-and-china-sign-historic-agreement-on-audit-firm-supervision/)