When the Hong Kong Stock Exchange announced in early December that it would list Chinese companies that use mainland accounting standards and auditors, the international investment community was surprised, to say the least.
One of the strongest and most reputable markets in the world had decided to welcome companies with financial statements prepared in a country plagued by quality scandals, conflict of interest, and outright corruption. If the food’s not safe in China, the thinking went, why would you trust the numbers?
