Chinese Companies Will Get U.S. Oversight

The Public Company Accounting Oversight Board (PCAOB) will begin observing corporate audits in China under an agreement reached Oct. 9.

PCAOB had wanted full access to inspect Chinese audits of U.S. companies, but Chinese resistance, based on  sovereignty concerns, led to “observational visits,” only the New York Times reported. The PCAOB chair has called for an inspection plan to be in place by the end of the year.

Paul Gillis, a professor at Peking University’s Guanghua School of Management, called the agreement “a face-saving way to kick the can down the road,” arguing the accounting oversight board might decide to extend its year-end deadline for a full inspection deal.