Sino -US regulatory agencies signed a cooperation agreement to promote cross -border audit supervision and cooperation in accordance with the law

The China Securities Regulatory Commission announced on August 26 that the China Securities Regulatory Commission and the Ministry of Finance signed an audit supervision cooperation agreement with the US Public Corporation's Accounting Supervision Committee (PCAOB) and will start related cooperation matters in the near future. This indicates that the regulatory agency between China and the United States has taken an important step to solve the common concern of audit supervision and cooperation.

Promote cross -border audit supervision and cooperation in accordance with the law, and achieve their respective supervision needs on the premise of complying with the laws of both parties. It is of positive significance for improving the quality of the practice quality of the accounting firm and protecting the legitimate rights and interests of investors. A good regulatory environment. Promoting cross -border audit supervision and cooperation in accordance with the law, and maintaining the unblocked overseas listing channels of enterprises, is a win -win choice for the benefits of capital markets, listed companies and global investors in the two countries.

Adhere to laws and regulations in accordance with laws and regulations.

At present, more than 280 Chinese companies are listed in the United States, and more than 30 domestic accounting firms in China have registered in PCAOB to provide audit services for Chinese listed companies in the United States. Due to the launch of many foreign companies in the United States, the firms that provide audit services are all over the world, and PCAOB usually establishes cooperation mechanisms with corresponding overseas regulatory agencies to conduct daily inspections and law enforcement investigations on relevant firms. It is understood that PCAOB has established related cooperation mechanisms with regulatory agencies in more than 50 countries and regions in the world. With the gradual deepening of the two -way opening of China's capital market, the cross -border listing and accounting firms cross -border exhibition industry of enterprises is becoming increasingly frequent. Sino -US regulators need to carry out corresponding regulatory law enforcement cooperation, strengthen supervision of relevant accounting firms, and jointly crack down on illegal illegal In violation of regulations, protect investors' legitimate rights and interests.

In the past ten years, the China Securities Regulatory Commission, the Ministry of Finance and PCAOB and other US regulatory agencies have maintained communication and consultation, tried too much cooperation methods, and accumulated some experience, but failed to fundamentally form a cooperation arrangement between the two parties and sustainable cooperation.

According to the China Securities Regulatory Commission, the cooperation agreement signed this time is the cooperation framework formed by the regulatory agencies of both parties on the basis of compliance with their respective domestic laws and regulations, and in accordance with the cooperation between the principle of mutual benefit and mutual benefit, which is in line with the international capital market audit supervision and cooperation practices.

According to the information of the CSRC, the cooperation agreement reflects three important parts. The first is to establish the principle of peering. The clause of the agreement has the same binding force on both parties. Both China and the United States can conduct inspections and investigations in accordance with the cooperation agreement in accordance with the legal duties, and conduct inspections and investigations in the other side of the other party. The request party shall provide full assistance within the scope of the law.

The second is to clear the scope of cooperation. The scope of the cooperation agreement includes assisting the other party to conduct inspections and investigations of relevant offices. Among them, the scope of China ’s assistance also involves part of the audit services for China Stocks, and the audit draft is stored in the Hong Kong firm in the Mainland.

The third is to clarify the way of collaboration. The two parties will conduct communication and coordination on the inspection and survey plan in advance. The United States must obtain documents such as the audit draft through the Chinese regulatory authorities, and conduct interviews and inquiries on relevant personnel of the accounting firm with the participation and assistance of China. The United States cannot enter the country alone to conduct investigation and evidence collection activities on relevant Chinese accounting firms, which is in line with relevant regulations on the China Securities Law.

Coordinate openness and security, improve institutional maintenance information security

Industry insiders pointed out that an important content of the daily inspection of accounting firms is to check the quality of the audit firms by checking the audit work. The audit work draft is a record of auditing work on accounting firms, mainly including information about corporate financial information, generally does not include sensitive information such as national secrets, personal privacy, and underground data of the enterprise.

In recent years, the relevant laws and regulations of information security such as data security law and personal information protection law have been implemented one after another. The information security responsibilities of relevant market entities have become more clear, and there are more chapters in operation. No matter where the enterprise is listed, it is obliged to abide by the laws and regulations of domestic information security.

Recently, the China Securities Regulatory Commission and other departments have improved the relevant confidentiality and archives management regulations of overseas listing, put forward clear requirements on the information security management of regulatory audit drafts, and further implemented the main responsibility of information security for listed companies. Sales and processing sensitivity information provides more detailed and executable guidelines, which helps to do a good job of preparing for the premise of meeting accounting audit requirements, and protect relevant information security in accordance with the law.

The cooperation agreement has made a clear agreement on the processing and use of a small amount of sensitive information in the cooperation. Especially for specific data such as personal information, a special processing method is set up, which provides a feasible path for both parties to perform legal supervision responsibilities while protecting relevant information security while protecting relevant information security. Essence

By improving domestic regulations and systems, regulating market entities, and refining regulatory cooperation agreements, sensitive information that may involve in audit supervision and cooperation will be properly handled. At the same time, such arrangements also help avoid "generalization" of sensitive information, so that the necessary business information can flow smoothly. Domestic and overseas agencies and regulators can perform their duties normally, and investors can make appropriate decisions.

Promote development with openness, continue to support enterprises to list abroad in accordance with laws and regulations

For more than two decades, a large number of Chinese companies went to listing overseas according to their own development needs. With the help of overseas capital markets to win development opportunities, they have also given back to global investors.In the new development pattern, the pace of global resource allocation of Chinese enterprises will not stop, and the direction of the international capital market will not change.On July 30, 2021, the Political Bureau of the Central Committee of the Communist Party of China proposed to improve the overseas listing supervision system.In the past year, the rules of the relevant system of overseas listing abroad have gradually improved, and it has clearly supported enterprises to go public in accordance with laws and regulations.In this context, the signing of the Sino -US audit supervision and cooperation agreement is conducive to unblocking channels for listing in the United States, further stabilizing market expectations, and in line with the direction of high -level institutional openness.All parties at home and abroad are expected to uphold the professional spirit, pragmatic cooperation, enhance mutual trust, implement a good agreement, and jointly create a good international regulatory environment for enterprises, add positive energy to global economic growth.

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