The ability of the U.S. to inspect those work papers for Chinese companies listed in the U.S. has been a years-long dispute. U.S. political and legal developments in the last two years have sped up the threat that the Chinese companies might need to delist from U.S. stock exchanges.signed a cooperation agreement that laid the regulatory basis for allowing U.S. inspections of audit firms within China's borders.
"The subject or the audience of this PCAOB investigation would be the audit firms," she said, emphasizing she is not an accountant.China's registered accounting firms are overseen by the the Ministry of Finance, making it the leader on the Chinese side of next steps, said Ming Liao, founding partner of Beijing-based Prospect Avenue Capital.
He said questions remain over what information the firms should share in order to remain compliant with Chinese regulation.Tsui said the inspections should go smoothly if it's just a matter of accountants on both sides, and there is no political interference on the U.S. side. He said the big four accounting firms — KPMG, PwC, Deloitte and EY — are members of the association.
"In the end, resolving the audit work paper problem relies on political interaction between China and the U.S.," Liao said in Chinese, according to a CNBC translation."With trust, this problem can very easily be resolved."The PCAOB said it will make a determination in December on whether China was still obstructing access to audit information.