At some point in September a team of American inspectors will touch down on Chinese soil in the hope of doing something miraculous: freely inspecting the internal auditing paperwork of Chinese firms listed on American exchanges. The agreement to do so, announced on August 26th, has been a decade in the making, and could prevent the delisting of some $940bn in Chinese shares that trade in New York. Success, however, is still far from guaranteed.
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Since 2011 the Public Company Accounting Oversight Board (pcaob), an auditing governance body, has demanded that accounting firms auditing New York-listed Chinese companies open the companies’ books for inspection. These reviews were made all the more urgent by repeated instances of fraud by Chinese firms. Yet the Chinese government had pushed back, at times…