SEC Charges China Affiliates of U.S. Accounting Firms for Failing to Produce Audit Documents

The SEC initiated administrative proceedings against the Chinese affiliates of various U.S. accounting firms for not producing audit work papers and other documents related to China-based companies under investigation for potential accounting fraud against U.S. investors. According to the Order, (i) the audit materials are being sought as part of SEC investigations into potential wrongdoing by nine China-based companies whose securities are publicly traded in the United States, and (ii) the audit firms' refusal to provide the documents sought by the SEC is in contravention of their legal obligations as foreign public accounting firms pursuant to Section 106(b) of Sarbanes-Oxley.

View Order in full here (links externally to SEC website).See also: Press Release.