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PCAOB publishes views on conflict with China rules

Tammy Whitehouse | January 3, 2017

To answer year-end questions about how U.S. audit rules intersect with those in China, the Public Company Accounting Oversight Board published a four-page Q&A to explain its views that firms auditing U.S. issuers should observe U.S. rules.

The five questions posed and answered in the PCAOB release are focused on how U.S. auditing standards might conflict with expectations explained by the Chinese Ministry of Finance in its 2015 statement outlining interim provisions on audits of domestic Chinese companies. The MOF provisions say overseas or domestic firms auditing mainland China companies are expected to follow Chinese law, especially with respect to protecting work papers that must be kept inside China.

That expectation has long been understood by audit firms operating in China who are registered with...

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