Sino-US audit deal hailed, but questions remain

A deal between Chinese and US regulators has been hailed as a key step toward opening the way to probes of bungled audits of US-listed Chinese companies, but experts say questions remain.

The China Securities Regulatory Commission said last week that it had signed an agreement with the US Public Company Accounting Oversight Board (PCAOB) to share audit records.

The regulators held investigative duties in their respective jurisdictions, and the agreement provided a mechanism for them to request and receive assistance from each other in obtaining documents and information, according to the PCAOB.

The deal came as a relief to auditors, who have long complained of being caught in regulatory conflicts between the world's two largest economies.

The US Securities and Exchange Commission (SEC) has charged the China affiliates of each of the "Big Four" auditors and another large US auditor for their refusal to provide audit work papers related to China-based companies investigated for potential accountancy fraud.

US laws require auditors to provide the SEC upon request with audit work papers involving any company trading in US markets.