Wall Street Journal (February 27)
“Tens of billions of dollars in U.S. market value have disappeared in recent years as more than 170 U.S.-listed Chinese companies have faced scrutiny for embezzlement, theft, misrepresentation and other alleged abuses.” Regrettably, the Securities and Exchange Commission (SEC) has caved-in on tighter inspections, deciding “not to suspend the Chinese audit firms or penalize them beyond token fines of $500,000.” As a result, U.S. investors “still lack basic protections against Chinese fraudsters” while Chinese authorities “remain as free as ever to stymie future investigations.” Furthermore, the SEC’s lack of spine increases “China’s rising confidence that it can play by its own rules.”
Tags: Abuses, Audit firms, Embezzlement, Inspections, Investors, Market value, Misrepresentation, Rules, SEC, Theft, U.S.-listed Chinese companies
Wall Street Journal (December 4)
“The U.S. Securities and Exchange Commission’s high-profile attack on the Chinese affiliates of five major accounting firms calls into question the future of China-based companies listing on the U.S. stock exchanges at a time when accounting scandals have eroded investor appetite for these companies.” If the Judge rules for the SEC, the audit firms “could be suspended from seeking new U.S.-traded clients, or even blocked entirely from auditing U.S.-traded companies.”
Tags: Accounting scandals, Audit firms, China, SEC, U.S.
Reuters (August 3)
Approximately 35% of companies in the S&P500 have used the same audit firm for 25 years or more. In fact, “Goldman Sachs has stuck with the same auditing firm since 1926, Coca Cola since 1921, General Electric since 1909 and Procter & Gamble since 1890.” Reformers argue that rotation should be required to increase scrutiny, but many oppose such a requirement.
Tags: Audit firms, Coca Cola, GE, Goldman Sachs, P&G, Rotation, S&P500, Scrutiny
