PCAOB Chair Williams Details US-China Audit Agreement

The transcript discusses a detailed agreement with China for audit access, highlighting its provisions, comparison with other countries, implementation steps, dispute resolution, and negotiation process. The agreement ensures complete access to audit work papers in China, with no special provisions for sensitive data. It outlines the steps for implementation and the consequences of non-compliance, emphasizing the importance of following the law. The negotiation process was lengthy, with no compromises from the PCB, ensuring compliance with the Holding Foreign Companies Accountable Act.

What is one of the key provisions of the agreement with China?

• The PCB must notify China before inspections.

• The agreement allows for partial access to audit papers.

• The Chinese government can redact sensitive information.

• The PCB can select which firms to inspect.

How does the agreement with China compare to those with other countries?

• It allows for more compromises than other agreements.

• It is more detailed and prescriptive than any other agreement.

• It includes special provisions for sensitive data.

• It is less detailed than agreements with other countries.

Where will the inspections and investigations be conducted?

• Beijing

• Guangzhou

• Shanghai

• Hong Kong

What determines the duration of the inspections and investigations?

• The number of auditors available

• The level of access provided by China

• The size of the audit firms

• The time of year

What happens if there is a dispute over access to audit work papers?

• The Chinese government will mediate the dispute.

• The agreement includes a dispute resolution mechanism.

• The law requires complete access, and non-compliance could lead to trading prohibitions.

• The PCB will negotiate new terms.

What is the consequence if the PCB cannot conduct complete inspections?

• The agreement will be renegotiated.

• The PCB will issue a warning to the companies.

• The inspections will be postponed.

• The SEC may impose a trading prohibition on Chinese companies.

Why did the negotiations with China take so long?

• The PCB was not clear about its requirements.

• The Chinese government was uncooperative.

• The agreement needed to be prescriptive and comply with the law.

• The PCB had to make many compromises.