Dialogue and cooperation is the right way to solve problems, says CSRC

China has never prohibited accounting firms from providing audit work papers to overseas regulators, and conducting open dialogues and cooperation is the right way to solve problems, said China Securities Regulatory Commission (CSRC) on Saturday, replying questions about a report by the U.S. Treasury Department recommending the delisting of Chinese companies with audit deficiency.

"We have noticed relevant reports from the U.S. In today's highly globalized capital market, strengthening the supervision of information disclosure of listed companies and improving the professional ethics and auditing quality of auditors are important means to protect the legitimate rights and interests of investors, and also the common responsibility of global securities regulatory agencies," said the CSRC on its website.

Actually, China and the U.S. have maintained communication and interaction. Since 2019, China's securities regulators have kept in touch with the Securities and Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) on the joint inspection plan of accounting firms. On August 4 this year, Chinese securities regulators have sent the updated plan to the PCAOB in accordance with the latest demands and thoughts from the U.S. sides, said the CSRC.

As mentioned in the U.S. report, China's securities authority has provided its U.S. counterpart the auditing work papers for many Chinese companies listed in the United States. The exchange of information such as audit work papers should be conducted through supervisory cooperation channels, which is a common practice in line with international practices, said the CSRC.

"Dialogues and cooperation are the right way to solve problems. Only in this way, can a good environment be created for the healthy and orderly operation of the global capital market," said the CSRC.

(Cover via VCG)