Kennedy statement on U.S.-China agreement on auditing Chinese firms

Press Release

Sen. John Kennedy (R-La.) today released the following statement in response to a Statement of Protocol (SOP) agreement made between the Public Company Accounting Oversight Board (PCAOB) and Chinese authorities that increases scrutiny of Chinese companies that list on U.S. stock exchanges:

"Today's agreement between the PCAOB and Beijing is only a first step in a long journey of China's proving that its pattern of deceit and market manipulation is over. China needs to grasp that just one deception will get its companies booted off U.S. exchanges.

"The SEC should make no exceptions. It must allow no loopholes. We have to hold China to the same standards as every other company and every other country that lists on American exchanges.

"This agreement only highlights the need for Congress to strengthen the integrity of our markets by passing the Accelerating Holding Foreign Companies Accountable Act without delay. It's not time to give China any benefit of the doubt--not when Americans' savings are at stake. It's time to make even more certain that Beijing gives U.S. officials the information they need to keep U.S. investors safe from the schemes we've seen from China too many times before. The Accelerating Holding Foreign Companies Accountable Act would allow the SEC to kick lying companies off our exchanges even faster.

"Here's our message to China: We've got the regulatory hammer, and we will use it without flinching," said Kennedy.

The SOP includes the following agreements, which Chinese authorities have committed to:

The PCAOB will have sole discretion to select which firms to audit.
The PCAOB can retain documents for inspection and investigation purposes. Additionally, audit work must be complete without redactions.
The PCAOB has direct access to interview and take testimony of personnel associated with audits the PCAOB inspects or investigates.
The PCAOB can share all of this data with the Securities and Exchange Commission (SEC) for all SEC-related purposes, including administrative or civil enforcement actions.

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