China sends regulators to Hong Kong to assist U.S. audit inspection-sources

Beijing has sent a team of regulatory officials to Hong Kong to assist the US audit watchdog with onsite audit inspections involving Chinese companies, four people familiar with the matter said, as part of a landmark deal between the two countries. A China-US agreement last month allows U.S. regulators, for the first time, to inspect China-based accounting firms that audit New York-listed companies, a major step towards resolving an audit dispute that threatened to boot more than 200 Chinese companies from US exchanges. About 10 officials from the China Securities Regulatory Commission (CSRC) and the Ministry of Finance (MOF) have arrived in Hong Kong and joined the audit inspection, which started on Monday, three of the people said. The officials will assist a team of inspectors from the Public Company Accounting Oversight Board (PCAOB), the US audit watchdog, who are in Hong Kong for the onsite inspection, the four people said. All of the sources declined to be named due to the sensitivity of the matter. Representatives at CSRC and MOF did not immediately respond to Reuters requests for comment. The PCAOB did not respond to Reuters queries sent outside US business hours. The gathering of US and Chinese officials together in Hong Kong marks a major step forward in what was expected to be a fraught process implementing the audit deal, the most detailed agreement the PCAOB has ever reached with China.<br/>