China Urges SOEs to Drop Big Four Auditors

The video discusses China's directive for state-owned companies to gradually replace BIG4 audit firms with local auditors, citing data security concerns and a desire to develop local expertise. This move could impact international investors' perception of China's openness to foreign expertise and affect the appeal of Chinese companies in global markets. The situation is still developing, and its full impact remains to be seen.

What is the main directive given by Beijing to state-owned companies regarding audit firms?

• To immediately terminate contracts with BIG4 firms

• To gradually replace BIG4 firms with local auditors

• To increase the number of audits conducted by BIG4 firms

• To hire more international auditors

Why is China concerned about using Western auditors for its companies?

• Due to language barriers

• Because Western auditors lack expertise

• Because of data security concerns

• Due to high costs associated with Western auditors

What potential challenge might international investors face due to China's audit policy change?

• Increased transparency in financial reporting

• Difficulty in accessing Chinese financial markets

• Higher costs for auditing services

• More stringent regulatory requirements

What is one reason China wants to develop its local auditing professionals?

• To handle larger companies with local expertise

• To increase competition among auditors

• To comply with international standards

• To reduce unemployment rates

How might China's audit policy changes affect its image regarding openness to global expertise?

• It may enhance China's image as open to global expertise

• It will make China more attractive to international investors

• It will have no impact on China's image

• It may send a negative signal about openness