The Public Company Accounting Inspection Board (PCAOB) issued a statement saying that the change in the rule would ascertain whether local authorities have obstructed the oversight of foreign accounting firms that audit US companies.
The United States Accounting Inspection Board has proposed a draft rule. Under this, foreign companies not complying with US accounting standards will be removed from the US stock exchange. According to the South China Morning Post (SCMP), this is being done to rapidly implement a law of Trump administration. Under this, if the Chinese companies did not share the audit with the US for review, then they would be removed from the US stock exchange in three years.
The Public Company Accounting Inspection Board (PCAOB) issued a statement saying the change in the rule would ensure whether local authorities obstructed the oversight of foreign accounting firms that audit US companies.
PCAOB Chairman William Duhnke-3 said the rule is about situations where foreign officials have denied the PCAOB the necessary access to conduct its mandatory surveillance activities. Meanwhile, Chinese law experts have said that the target of this law is clearly Chinese companies. Under this, Chinese companies have to tell about directors and executive officers, who are members of the Chinese Communist Party. This is very unusual.