A policy analyst from the America First Policy Institute (AFPI) said that the Public Company Accounting Oversight Board must ensure China’s full compliance, without exception, to the Holding Foreign Companies Accountable Act to ensure the integrity of America’s economy.
“Now, more than ever, the United States must hold China accountable for its egregious exploitation of U.S. financial markets. U.S. Consumers and Investors alike should have the assurance that their financial assets are protected from unaccountable and noncompliant Chinese corporations controlled by the Chinese Communist Party that are listed on U.S. stock exchanges,” David Vasquez, AFPI policy analyst, told State Newswire on Sept. 19. “The Public Company Accounting Oversight Board (PCAOB) must be unwavering, ensuring full compliance, without exception, to The Holding Foreign Companies Accountable Act to ensure the integrity of America’s economy.”
Vasquez’s comments come a few weeks after Sen. Marco Rubio (R-FL) urged the PCAOB to accept only full compliance to the Holding Foreign Companies Accountable Act. Rubio said that Chinese companies have ignored U.S. rules for years as they enrich themselves off U.S. financial markets, exposing Americans to financial risk, according to a press release.
“That day is coming to an end. Either firms listed on U.S. exchanges will provide full transparency to auditors or they will be delisted,” he said, the release reported.
Approximately 200 Chinese companies on U.S stock exchanges must comply, or risk being delisted, Reuters reported. According to the Securities Exchange Commission, China-based U.S. issuers have a combined market capitalization of between $1 trillion to $2 trillion.
“A threat to our financial security is a threat to our national security. America must make it abundantly clear that we will confront Chinese corruption that and protect our interests and people above all else,” Vasquez said in his statement to State Newswire.
U.S. auditors should great the Chinese Communist Party’s agreement to allow them to look at their books with a high level of skepticism as China has repeatedly failed to uphold its international commitments, the release said. Full compliance and transparency must be demanded because “the livelihood of millions of American retirees, pensioners, and other investors is on the line,” Rubio said.
His remarks came as Chinese and U.S. regulators agreed to a pact allowing Chinese companies to operate on U.S. stock exchanges if Chinese companies allow U.S. regulators to audit a Chinese company's accounting records, Reuters reported.
The Holding Foreign Companies Accountable Act requires certain issuers of securities to establish that they are not owned or controlled by a foreign government, according to a Senate bill summary. Specifically, an issuer must make this certification if the PCAOB is unable to audit specified reports because the issuer has retained a foreign public accounting firm not subject to inspection by the board.
The PCAOB oversees the audits of public companies and SEC-registered brokers and dealers in to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports, according to its website.
