Dialogue is a win-win situation! China Securities Regulatory Commission (CSRC) provides audit working papers of 14 companies to the US side

category:Finance
 Dialogue is a win-win situation! China Securities Regulatory Commission (CSRC) provides audit working papers of 14 companies to the US side


Recently, the U.S. Treasury Department released the report of the presidents financial market working group on the protection of American investors against major risks of Chinese companies on its official website. In view of the jurisdictions where the public company accounting oversight board (PCAOB), including China, is unable to carry out inspection, it is suggested to raise the listing threshold for companies from these jurisdictions, strengthen information disclosure requirements, and strengthen investment climate It also requires that the listed companies in the United States meet the relevant requirements of PCAOB for inspection no later than January 1, 2022.

The China Securities Regulatory Commission has taken note of the relevant reports of the US side. China Securities Regulatory Commission (CSRC) believes that in todays highly globalized capital market, strengthening the supervision of information disclosure of listed companies and improving the professional integrity and practice quality of auditors are important means to protect the legitimate rights and interests of investors, and are also the common responsibility of global securities regulatory agencies, which must be implemented by strengthening cross-border regulatory cooperation. Therefore, proceeding from the common interests of both sides and carrying out dialogue and cooperation in an open and open manner is the right way to solve the problem.

In fact, the two sides have always maintained communication and interaction. The SFC said that since 2019, the Chinese regulatory authorities have communicated with the US Securities Regulatory Commission (SEC) and the public company accounting oversight board (PCAOB) on the joint inspection scheme for accounting firms on many occasions, showing full cooperation sincerity. Recently, on August 4, 2020, the Chinese regulatory authorities sent an updated proposal to PCAOB according to the latest needs and ideas of the US side. The CSRC believes that the only way to achieve win-win results is to solve the issues of common concern through dialogue. Only in this way can we create a good environment for the healthy and orderly operation of the global capital market.

The CSRC explained that China has never prohibited or prevented relevant accounting firms from providing audit working papers to overseas regulators. As mentioned in the US report, Chinas securities regulatory authorities have so far provided US securities regulators with audit working papers of a number of Chinese companies listed in the United States. The CSRC believes that the essence of Chinas laws and regulations is that the exchange of information such as audit working papers should be conducted through regulatory cooperation channels, which is a common practice in line with international practice.

China Securities Regulatory Commission cracking down on financial fraud

In response to the financial fraud of Ruixing coffee, the CSRC, together with the Ministry of Finance and the General Administration of market supervision, recently imposed administrative penalties on the domestic operation entities and relevant responsible persons of Ruixing coffee, a number of third-party companies assisting in counterfeiting and false publicity, two new third board related companies and relevant responsible persons. If the relevant responsible subjects are suspected of committing crimes, they will be transferred to the public security department according to law The legal organs have released the attitude of zero tolerance to the violation of laws and regulations in the capital market.

In terms of audit supervision of listed companies, the CSRC has always attached great importance to strengthening the supervision and law enforcement of capital market gatekeepers, such as accounting firms, to promote the establishment and improvement of quality control system, improve the quality of practice, and continuously promote the quality of financial information disclosure. At the same time, China Securities Regulatory Commission actively promotes cooperation with overseas audit regulatory agencies. As for the Chinese accounting firms registered in PCAOB as required by PCAOB in the United States, the cooperation between the two sides has never stopped, and they have been looking for an inspection scheme acceptable to all parties. In 2013, China Securities Regulatory Commission and the Ministry of Finance signed a memorandum of understanding on law enforcement cooperation with PCAOB of the United States, and provided PCAOB with four audit working papers. From 2016 to 2017, China and the United States conducted a pilot inspection on a Chinese accounting firm registered in PCAOB. The Chinese team assisted PCAOB to inspect the quality control system of the accounting firm and the audit working papers of three listed companies in the United States, trying to find an effective inspection way. It should be said that the cooperation between the two sides has been fruitful. Since 2018, in order to continue to promote the cooperation in audit supervision, the Chinese side has referred to the practice of international audit supervision cooperation and put forward specific proposals for joint inspection of accounting firms to PCAOB, the latest of which was on April 3 this year. The CSRC looks forward to receiving a response as soon as possible and further cooperation with PCAOB.

China Securities Regulatory Commission believes that cross-border listing of enterprises is conducive to enriching investment options in the local capital market and improving investment returns. Practice has proved that it is a win-win choice. To improve the quality of information disclosure of listed companies is the common responsibility of regulatory agencies in various countries. It is in the common interests of global investors to deepen cross-border regulatory law enforcement cooperation. We are willing to strengthen cooperation with overseas securities regulatory agencies, including the United States, to jointly crack down on cross-border violations and protect the legitimate rights and interests of investors in various countries in accordance with the law. According to the CSRC, it is the common responsibility of global securities regulators to crack down on financial fraud in the capital market and protect the legitimate rights and interests of investors. The CSRC will fully implement the zero tolerance requirement of the financial commission of the State Council for illegal and criminal acts in the capital market, build a three-dimensional accountability system of administrative punishment, criminal accountability, civil compensation and integrity punishment, make full use of the responsibilities given by law, and comprehensively use administrative continuous heavy blows to attack illegal behaviors in the capital market. We will continue to strengthen close cooperation with domestic and foreign regulatory and law enforcement departments, steadily promote the investigation and disposal of Ruixing coffees financial fraud in accordance with the law, severely crack down on it and never tolerate it, and resolutely safeguard fair and just market order and healthy market ecology under the rule of law. This article is from Guo Chenqi, editor in charge of securities companies in China_ NBJ9931

China Securities Regulatory Commission believes that cross-border listing of enterprises is conducive to enriching investment options in the local capital market and improving investment returns. Practice has proved that it is a win-win choice. To improve the quality of information disclosure of listed companies is the common responsibility of regulatory agencies in various countries. It is in the common interests of global investors to deepen cross-border regulatory law enforcement cooperation. We are willing to strengthen cooperation with overseas securities regulatory agencies, including the United States, to jointly crack down on cross-border violations and protect the legitimate rights and interests of investors in various countries in accordance with the law.