China and U.S sign agreement on audit dispute

HONG KONG :The U.S. audit regulator said on Friday it has signed an agreement with Chinese regulators, taking a first step toward inspecting and investigating registered accounting firms in China and Hong Kong.

The Public Company Accounting Oversight Board (PCAOB) said it is the most detailed and prescriptive agreement the PCAOB has ever reached with China.

U.S. regulators have for long been demanding access to audit papers of Chinese companies listed in America, but Beijing has been reluctant to let overseas regulators inspect accounting firms, citing security concerns.

In a statement, the PCAOB said the agreement would allow it "sole discretion to select the firms, audit engagements and potential violations it inspects and investigates – without consultation with, nor input from, Chinese authorities."