Chairman Rick Scott of the U.S. Senate Special Committee on Aging and Chairman John Moolenaar of the U.S. House Select Committee on the Chinese Communist Party (CCP) have reached out to Paul Atkins, chairman of the U.S. Securities and Exchange Commission (SEC), and Erica Williams, chairwoman of the Public Company Accounting Oversight Board (PCAOB). They are requesting a briefing concerning audit oversight in relation to firms connected with Communist China.
The request is driven by concerns that current agreements between PCAOB and China's securities regulators may allow CCP interference with critical financial data, potentially compromising protections under the Holding Foreign Companies Accountable Act (HFCAA). The chairmen are seeking clarity on whether HFCAA is being adequately enforced, given ongoing CCP influence over Chinese companies listed on U.S. exchanges.
This follows an April 2025 joint hearing where significant threats posed by Communist China to American investments were discussed. "We write today to request a briefing with your office regarding access to information and auditing standards for companies under the jurisdiction of China and its ruling Chinese Communist Party (CCP)," they stated in their letter.
The HFCAA was enacted in 2020 affecting over 200 Chinese companies listed on U.S. stock exchanges. It requires PCAOB to determine if it can fully inspect or investigate due to foreign authority positions. Noncompliant companies face delisting after two years.
In August 2022, PCAOB and Chinese regulators agreed on information access within China for U.S.-listed companies. This agreement has raised concerns about inadequate protection for American investors as it allows CCP control over auditor access and withholding certain information categories.
Senator Scott previously expressed these concerns in a letter to then-SEC Chairman Gary Gensler when PCAOB made this agreement public. These issues remain unaddressed while Chinese companies continue accessing American investor capital through U.S. exchanges.
In May 2025, further risks associated with China-based companies were highlighted in another letter sent by the committees emphasizing how CCP-linked firms cannot operate independently from state influence due to laws like the National Intelligence Law of 2017.
Given these circumstances, Chairmen Scott and Moolenaar are urgently requesting a briefing from SEC and PCAOB regarding current agreements with Chinese securities regulators along with implications for U.S. investor protections.
