E-commerce giant Alibaba is among the first Chinese companies to face US audit inspections following last week’s landmark agreement between Beijing and Washington that will allow American regulators to overlook Chinese accounting firms.
According to sources cited by Reuters, Alibaba is slated to face regulatory oversight by the Public Company Accounting Oversight Board (PCAOB) beginning sometime in September, after China finally agreed to give US regulators permission to audit US exchange-listed Chinese companies. Alibaba’s accounting company, PwC, will also be subject to the inspections.
Washington and Beijing have been locked in a 10-year battle regarding inspection compliance of the latter’s accounting firms, over which the communist country has thus far refused due to alleged national security concerns. Earlier this summer, the e-commerce company even entered the SEC’s list of over 160 Chinese firms that could face delisting come 2024 should they fail to comply with US audit requirements.
Following the news, Alibaba shares sank almost 3%, after rising about 1% in pre-market trading.
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.