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China and U.S. Negotiate On-Site Audit Checks as Delistings Loom

  • Talks on bringing PCAOB inspection team to China are ongoing
  • On-site inspections are first step to complying with U.S. law

Beijing is discussing with American regulators the logistics of allowing on-site audit inspections of Chinese companies listed in New York, according to people familiar with the matter, a sign of progress in talks to keep U.S. stock markets open to issuers from Asia’s largest economy.

Regulators on both sides are negotiating how to let a team of inspectors from the Public Company Accounting Oversight Board visit China so they can scrutinize auditing procedures and access the reports of a majority of 261 U.S.-listed firms, the people said, requesting not to be named because the matter is private. The talks, aimed at preserving these listings and reviving fresh public offerings, include hammering out issues such as quarantine requirements, the people added.