Macau Under Spotlight Amid U.S. Inspections of China-Based Audits

Macau Under Spotlight Amid U.s. Inspections Of China-Based Audits - Medium

A recent agreement between Washington and China allowing U.S. accounting regulators to inspect China-based audits is raising questions about the role of unregistered auditors in the Chinese gambling enclave of Macau, where several U.S.-listed casino businesses operate.

Auditors typically assemble a team involving several outside auditors, usually individual accountants or accounting firms, as their clients often operate globally. Under U.S. audit rules, any audit firm that performs at least 20% of the audit work based on hours or fees is required to register with the Public Company Accounting Oversight Board, the U.S. audit watchdog. The PCAOB, however, cannot sanction unregistered contributors.

Lead auditors, often the U.S. entities of the Big Four, for U.S.-listed companies must supervise contributing auditors and assume responsibility for their work. An audit firm currently doesn’t have to disclose in its annual audit opinion as part of a company’s financial statements if it…

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This article was written by and originally published on www.wsj.com