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2 posts from November 2011

PCAOB Will Not Get What It Wants in China - Gain a Quick Entrance into China for Inspection of Local Auditors

PCAOB has been pressing China to let it inspect auditors that audit US-listed Chinese companies since last summer.It is a reasonable request. Nothing wrong with it, at all. However, PCAOB's effort is heading to the wall. Why? Because it makes the most common mistake some American governmental entities and corporations tend to make when going to China - making criticism to begin with and enforcing American standards on Chinese without any compromise. (Reuters) - Chinese firms listed in the United States would be welcomed home, a senior Shanghai Stock Exchange official said, chiding the main U.S. auditor watchdog and other American institutions for having politicized company accounting issues. Click here for the full article. I agree with Paul Gillis, the visiting scholar of accounting at Peking University: "They (the U.S. side) have politicized it. They've made it more difficult to seek a compromise," said Paul Gillis, visiting professor of accounting at Peking University. PCAOB, as well as other organizations that want to accomplish anything in China, has to keep in mind that "saving face" (not embarrassing or criticizing someone in public) is Doing Business in China 101 Rule #1. Heating up pressure and blaming Chinese regulators in public will only... Read more →