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Biden Strikes Bad Deal on Chinese Audits

Dec 15, 2022 | Press Releases

The Public Company Accounting Oversight Board (PCAOB) announced Chinese regulators were in full compliance with U.S. securities regulations. As a result, more than 170 Chinese companies, many with overt ties to the Chinese Communist Party (CCP), will be able to continue operating on U.S. stock exchanges.
U.S. Senator Marco Rubio (R-FL), who helped write and pass the Holding Foreign Companies Accountable Act, criticized the PCAOB’s decision as short-sighted, naive, and dangerous. 

  • “Under pressure from Wall Street, the Biden Administration struck a bad deal with the Chinese Communist Party. Promises from Beijing are meaningless, just ask Hong Kong.
  • “The PCAOB’s job was to protect American investors by ensuring full compliance and transparency with U.S. officials. No deviations, no exceptions. The decision today shows a failure to do so, and creates more questions than answers for the American people.
  • “There should be bipartisan opposition to this decision, and Congress should act next year to reverse President Biden’s deal, which puts the livelihood of millions of American retirees, pensioners, and other investors at risk.” — Senator Rubio 

Because of the Biden Administration’s decision, these CCP-controlled companies will maintain access to more than $1 trillion in market capitalization.
The PCAOB selected two British-affiliated auditing firms to review, one in Hong Kong and one in mainland China. It used these firms’ openness to U.S. auditors as a litmus test for the entire country. No indigenous Chinese auditing firms were scrutinized and information about Chinese military installations was blocked from review.
Looking forward … While enactment of Rubio’s Holding Foreign Companies Accountable Act helped force the CCP to the negotiating table and allow for a level of transparency unprecedented, the PCAOB did not live up to the law. Rubio will work with colleagues to ensure that it does.  
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