Author: animal production team leader source: official account: animal production team
This is a major good news.
This means that Chinese companies will be able to continue to be listed on the US stock market and will not be delisted for refusing to submit audit reports. The Chinese and American governments have finally reached an agreement on the supervision of China concept shares.
This is good news for equality, justice, mutual benefit and win-win results. The cloud of delisting hanging over the head of China’s stock market can finally be removed. Since the introduction of the foreign company Accountability Act in the United States, 159 Chinese concept stocks have been pulled into the pre delisting list by the United States. The overall market value of China concept stocks has been seriously reduced, and the market value of 100 China concept stocks is lower than that of an apple company in the United States.
This is extremely unreasonable. The direct reason for this irrationality is that the US government’s continuous suppression of China concept stocks has caused investors to have a serious lack of confidence in China concept stocks.
In order to solve the problem of China capital stock, we must resolve the differences between China and the United States on audit supervision. As far as China is concerned, state secret data must not be disclosed. For the United States, the listing method of China concept shares is very special. American companies listed in the United States are all listed in entities, except that China concept shares adopts the vie agreement control mode. The listed entity is not an entity, but an overseas shell company. As a direct result, there is a large room for financial fraud in zhonggai shares, and the most famous one is the Ruixing fraud event.
The occurrence of such financial fraud has caused huge losses to the investors of zhonggai shares. To put an end to more financial fraud incidents of China capital stock company, we need close cooperation between China and the United States to eliminate them from the source of the audit draft. This is the direct reason why China and the United States signed the audit supervision cooperation agreement. This is not only to continue Sino US cooperation, but also to further improve the financial supervision of listed companies and ensure the interests of investors.
The audit and supervision cooperation agreement signed by China and the United States has five highlights:
First, the object of supervision is accounting firms, not listed companies. Because the financial reports of listed companies are issued by accounting firms. We take the financial fraud of Ruixing coffee as an example. The financial report of the IPO in the United States was prepared by PricewaterhouseCoopers of the United States, and the audit report after the IPO was prepared by Ernst & Young of the United Kingdom. When the financial fraud of Ruixing coffee was exposed, the accusations poured into Ruixing. But what about PwC and Ernst & young? Are they not responsible?
If they know that Ruixing’s financial report is false, and they still get out of the audited financial report, is there any act of shielding and shielding? If the financial fraud of Ruixing coffee is not found in their audit, is their professionalism questionable? Or did they take Ruixing’s money and deliberately release water for Ruixing?
The reputation of PWC in China is almost infamous. After its audit, China Evergrande, Lenovo Group, Didi group, rongchuang group and HNA Group all did not explode in general, and an explosion was a big surprise. However, in the audit report of PricewaterhouseCoopers, Evergrande, didi and rongchuang are all right. What is the problem?
China Evergrande misappropriated 13.4 billion from Evergrande property, which was not reflected in the audit report of PWC. How can this be explained?
For the CSRC, to strengthen the financial audit of listed companies, it is first necessary to consolidate the audit responsibility of accounting firms. On this point, the consensus reached by the Chinese and US governments is a great progress. Otherwise, the Chinese stock market will explode, and the American accounting firm will have nothing to do. This is unscientific and unreasonable.
In the just signed Sino US audit supervision cooperation agreement, it is clearly stated that China has the right to supervise American accounting firms and request the United States to provide necessary assistance. The regulation is not the unilateral regulation of Chinese listed companies by the US government, but also the regulation of American accounting firms by the Chinese government. This is fair and equal.
Second, the audit draft of zhonggai company is kept in Hong Kong accounting firm and not submitted to the United States. Both the Chinese and US governments have the right to access and review the audit papers deposited in Hong Kong.
Third, the audit draft is only limited to the financial data of listed companies, and shall not involve state confidential data prohibited by Chinese laws. What can be seen is open and transparent. The audit manuscript is the original material of the audit report issued by the accounting firm. If the accounting firm cooperates with the listed company to jointly fabricate, the audit draft can become the original evidence, and the accounting firm will be severely punished and severely punished according to the law, including banning its audit qualification and sending the relevant responsible person to prison.
Whether you are an American accounting firm or a Chinese accounting firm, you will be subject to the legal supervision of both China and the United States. This will greatly improve the professional quality of accounting firms.
The fourth is to adopt the annual sampling method, and the sampling object is accounting firms, not listed companies.
Fifth, allow Chinese companies to continue to list in the United States. This is a win-win situation for China and the United States. U.S. investors can continue to enjoy the capital dividends brought by the rapid growth of Zhongjian stock company, while Chinese companies can also raise funds in U.S. stocks at a lower cost, and promote the development of local industries with the help of U.S. dollar capital.
From the above, we can see that the biggest change in the Sino US audit supervision cooperation agreement is that the supervision object is transferred to the accounting firm, and the main pressure of risk and responsibility is also transferred to the accounting firm.
In the foreign company Accountability Act of the United States, all audit responsibilities are placed on the company, forcing the company to submit all audit drafts. This allows accounting firms to make a lot of money on the one hand and not take risks on the other. Almost all the risks are carried by listed companies. However, the audit work is originally done by accounting firms.
Why are there so many uncompleted residential buildings? Although the real estate enterprises are abominable, the misappropriation of regulatory funds is the direct factor. It is a typical presumption of guilt that the United States requires all China concept companies to submit audit reports, and requires all China concept companies to prove their innocence. This is undoubtedly unfair, and it is also an insult to the reputation of China equity and discrimination against China equity.
However, the supervision of accounting firms is different. This can compact the responsibility of accounting firms, so that they can replace the Chinese and American regulatory agencies and do a good job in the audit of listed companies through market means. It can not only avoid any mouse excrement, but also ensure the interests of investors. It can also ease the financial conflicts between China and the United States and create a win-win situation. The only loser is the accounting firm. We can no longer fish in troubled waters and lie down to earn black money.
This is a small step for China and the United States, but it is a big step for China’s financial supervision.
I strongly recommend that the supervision method for the audit work of zhonggai shares be actively introduced into a shares. Domestic accounting firms are more unscrupulous than foreign ones. There are many companies that make financial fraud on the A-share market. Accounting firms and listed companies jointly make fraud. The crime cost is extremely low, but the return is extremely high.
LETV, Kangmei pharmaceutical, St Fushang, St HNA, kangdexin, CITIC Guoan, Juli culture, Dehao Runda, Tongjitang, etc. there are too many, and the losses of shareholders are countless. As long as accounting firms and listed companies work together to fabricate, it is almost inevitable that investors will become leeks. The false increase in revenue and profits created a false illusion of a good situation, and then exploded a huge thunder, which was no less powerful than Telecom fraud.
If the regulatory mechanism of A-share can be improved, the financial fighting rules between China and the United States will be of great benefit. We should not only protect the investors of China concept shares, but also protect the investors of a shares.