U.S. regulators and Chinese officials are set to resume discussions on an agreement to allow American inspections of U.S.-registered, China-based audit firms. If the talks are successful, the inspections would help restore confidence in U.S.-listed China stocks, allowing investors to be as confident in China names as they are in U.S. names.
The Public Company Accounting Oversight Board, an audit watchdog organization overseen by the SEC, wants U.S. and Chinese inspectors to conduct joint reviews of Chinese audit firms, including Big Four affiliates located in China.
As the China small-cap sector continues to rebound from last year’s implosion, investors should keep an eye on this interesting development in the weeks ahead.
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