The China Securities Regulatory Commission announced on August 26 that the China Securities Regulatory Commission, the Ministry of Finance and the US public company accounting supervision board (PCAOB) signed an audit supervision cooperation agreement, and will launch relevant cooperation matters in the near future. This marks an important step taken by the regulatory authorities of China and the United States to address the common concern of audit and regulatory cooperation.
Promoting cross-border audit and regulatory cooperation in accordance with the law and realizing their respective regulatory needs under the premise of abiding by the laws of both parties have positive significance for improving the practice quality of accounting firms and protecting the legitimate rights and interests of investors, and also help create a good regulatory environment for enterprises to carry out cross-border listing activities in accordance with the law and regulations. Promoting cross-border audit and regulatory cooperation in accordance with the law and maintaining smooth channels for overseas listing of enterprises are beneficial to the capital markets of the two countries, listed companies and global investors. It is a win-win choice.
Adhere to laws and regulations and establish reciprocal and mutually beneficial cooperation arrangements
At present, more than 280 Chinese enterprises are listed in the United States, and more than 30 domestic accounting firms are registered in PCAOB, providing audit services for Chinese enterprises listed in the United States. Since many foreign enterprises are listed in hairdresser and the firms providing audit services are all over the world, PCAOB usually establishes a cooperation mechanism with the corresponding overseas regulatory agencies to carry out daily inspection and law enforcement investigation on the relevant firms. It is understood that PCAOB has established relevant cooperation mechanisms with regulatory authorities in more than 50 countries and regions in the world. With the gradual deepening of the two-way opening up of China's capital market, the cross-border listing of enterprises and the cross-border development of accounting firms are increasingly frequent. The regulatory authorities of both China and the United States need to carry out corresponding regulatory and law enforcement cooperation, strengthen the supervision of relevant accounting firms, jointly crack down on illegal acts and protect the legitimate rights and interests of investors.
Over the past decade or so, China Securities Regulatory Commission and the Ministry of finance have maintained communication and consultation with PCAOB and other US regulatory agencies, tried various cooperation methods and accumulated some experience, but failed to fundamentally form a mutually acceptable and sustainable cooperation arrangement.
According to the introduction of China Securities Regulatory Commission, the cooperation agreement signed this time is a cooperation framework formed by the regulatory authorities of both sides on the basis of observing their respective domestic laws and regulations and in accordance with the principle of reciprocity and mutual benefit, and conforms to the common practice of international capital market audit and supervision cooperation.
Information from the CSRC shows that the cooperation agreement embodies three important aspects. First, establish the principle of reciprocity. The terms of the agreement are equally binding on both parties. Both China and the United States may, in accordance with their legal responsibilities and the cooperation agreement, conduct inspections and investigations on the relevant affairs within the jurisdiction of the other party. The requested party shall try its best to provide full assistance within the scope permitted by law.
Second, define the scope of cooperation. The scope of the cooperation agreement includes assisting the other party to carry out inspection and investigation on relevant affairs. Among them, the scope of assistance provided by the Chinese side also involves some Hong Kong firms that provide audit services for China capital stock and deposit the audit papers in the mainland.
The third is to clarify the mode of cooperation. The two sides will communicate and coordinate the inspection and investigation plan in advance. The US side must obtain the audit draft and other documents through the Chinese regulatory authorities, and conduct interviews and inquiries with the relevant personnel of the accounting firm with the participation and assistance of the Chinese side. The US side cannot enter the country alone to carry out investigation and evidence collection activities against relevant Chinese accounting firms, which complies with the relevant provisions of the securities law of China.
Make overall planning for openness and security, improve the system and maintain information security
Insiders pointed out that an important part of the daily inspection of accounting firms is to check the audit quality of the firms by checking the audit working papers. The audit work draft is the record of the audit work carried out by the accounting firm, mainly including the information about the financial information of the enterprise, generally excluding sensitive information such as state secrets, personal privacy and enterprise bottom data.
In recent years, China's data security law, personal information protection law and other information security related laws and regulations have been implemented in succession, and the information security responsibilities of relevant market entities have become more clear and there are more rules to follow in operation. No matter where an enterprise is listed, it has the obligation to comply with the national information security laws and regulations.
Recently, the China Securities Regulatory Commission and other departments have improved the confidentiality and file management regulations related to overseas listing, put forward clear requirements for standardizing the information security management of audit work papers, further implemented the main responsibility of listed companies for information security, and provided more detailed and executable guidance for enterprises and accounting firms to keep and handle confidential sensitive information according to laws and regulations, It is helpful to do a good job in the preparation of the manuscript on the premise of meeting the requirements of accounting and auditing, and protect the relevant information security according to law.
The cooperation agreement has made clear provisions on the processing and use of a small amount of sensitive information that may be involved in the cooperation. In particular, it has set up special processing methods for specific data such as personal information, which provides a feasible path for both parties to protect relevant information security while performing their legal regulatory responsibilities.
By improving domestic laws and regulations, standardizing the behavior of market entities and refining regulatory cooperation agreements, sensitive information that may be involved in audit and regulatory cooperation will be properly handled. At the same time, this arrangement also helps to avoid the "generalization" of sensitive information, so that necessary business information can flow smoothly, domestic and foreign intermediaries and regulatory agencies can perform their duties normally, and investors can make appropriate decisions.
댓글