ASA Statement on U.S. and China Audit Agreement

WASHINGTON, D.C. – Today, ASA released a statement regarding the agreement reached between the Public Company Accounting Oversight Board (PCAOB) and Chinese authorities, which allows the board to inspect and investigate audit firms based in China and Hong Kong whose clients trade on American exchanges.

“For too long, Chinese Communist Party-controlled companies have exploited our markets by refusing to comply with basic U.S. transparency and audit requirements,” ASA CEO Chris Iacovella said. “For good reason, ASA echoes SEC Chairman Gensler’s skepticism and we remind American investors that this deal simply marks the first step in holding CCP-controlled companies accountable to U.S. laws. ”

“The House must protect American investors by passing the Accelerating Holding Foreign Companies Accountable Act, which shortens the time frame to delist non-compliant Chinese companies from U.S. stock exchanges,” Iacovella said.

According to the U.S. Securities Exchange Commission (SEC), over 50 jurisdictions comply with the PCAOB’s inspection and investigation requirements for audit firms with U.S.-listed companies—with a notable exception of China and Hong Kong.

For years, ASA has been at the forefront of advocacy to end China’s fraud on our markets. ASA praised the unanimous Senate passage of the bipartisan Accelerating Holding Foreign Companies Accountable Act and commended the SEC for adopting amendments to finalize rules related to the bill. ASA applauded the Biden Administration for issuing an Executive Order banning American investment in companies financing Communist China and called on Congress to further strengthen investor protections to remove fraudulent Chinese companies from U.S. exchanges more quickly. And click here to read ASA CEO Iacovella’s op-ed on China and the U.S. capital markets.