SEC Warns Against Switching Auditors to Avoid Chinese Company Trading Bans

SEC Warns Against Switching Auditors to Avoid Chinese Company Trading Bans
The seal of the U.S. Securities and Exchange Commission (SEC) at their headquarters in Washington on May 12, 2021. Andrew Kelly/Reuters
Reuters
Updated:
0:00

WASHINGTON/HONG KONG—U.S. accounting firms that agree to lead audits of New York-listed Chinese and Hong Kong companies looking to avoid potential trading bans risk breaching U.S. rules, the U.S. Securities and Exchange Commission (SEC) warned on Tuesday.

Worried they may be kicked off U.S. exchanges if China does not allow the SEC’s accounting watchdog to vet Chinese company audits, some U.S.-listed Chinese and Hong Kong companies have recently switched their lead auditor from a local to a U.S. or other foreign firm, the SEC said.