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UBS suspends employees
after inquiry into hiring
Swiss bank UBS suspended two Hong Kong staff
last month after launching an investigation into
the hiring of an employee related to the head of
a corporate client. Joseph Chee, Head of Capital
Markets at UBS, and Sharlyn Wu, a member of his
team, were reportedly put on leave after an inquiry
into the bank’s potential role in an initial public
offering of Tianhe Chemicals and its hiring of
Joyce Wei, daughter of Tianhe Chairman Wei Qi.
National auditor to focus
on five key weaknesses
The National Audit Office will impose stricter
standards in key areas to intensify its crackdown
on corruption, Xinhua reported last month. The
office will focus on five key areas: fiscal fund
management, public project construction, ex-
tension of bank loans, land transfer and state
IASB member blames fraud
on lax Nasdaq listing rules
Lax listing rules on the Nasdaq Stock Market in
New York are part of the cause of alleged ac-
counting frauds by Chinese businesses, Zhang
Weiguo, China’s representative on the Interna-
tional Accounting Standards Board, said last
month. Zhang told the Australian Financial Re-
view that the United States and China should
cooperate more on accounting related issues.
Hong Kong companies
to hire more in first half
Hong Kong companies plan to increase their hir-
ing of accounting talent in the first half of 2014,
according to survey results released last month
by recruitment firm Robert Half. Banking and
finance positions should also record positive
growth, the firm said, citing a poll of 400 client
companies surveyed late last year.
IPOs heat up, from
livestock to lingerie
The momentum of Hong Kong’s initial public
offering market is set to continue in the second
quarter with the world’s largest pork producer,
WH Group, seeking to raise HK$39 billion in April.
Two Mainland lingerie firms Cosmo Lady and
Chaoying, hope to raise a total of HK$3 billion.
Big Four affiliates appeal
against six-month U.S. ban
SEC has seven months to consider judgment
The China affiliates of the Big Four accounting firms have filed appeals with the
Securities and Exchange Commission in the United States in a bid to reverse an
administrative law judge’s decision to ban the firms from practising in the U.S.
for six months.
Chinese officials had signalled that diplomatic progress over an accord
covering mutual inspection of audit work papers could be derailed if the SEC
upholds the judge’s January decision, Bloomberg reported last month.
The Chinese arms of the Big Four – Ernst & Young Hua Ming, KPMG Huazhen,
PricewaterhouseCoopers Zhong Tian and Deloitte Touche Tohmatsu – were
barred for six months from leading audits of U.S. registered companies, after
failing to turn over audit documents requested by the SEC.
The SEC can confirm the bar, reverse the judge’s decision or do anything in
between. Under commission rules, the SEC has seven months to consider the
matter and can extend that deadline indefinitely if there are “extraordinary
facts and circumstances.”
If the SEC upholds the judge’s decision, the firms could ask the U.S. Court of
Appeals in Washington to overturn the bar. A bar would force more than 200
Chinese companies traded in the U.S. to find new auditors, while multinationals
with significant operations in China would have to bring in new firms to check
The Chinese auditing firms have argued they are caught between U.S. law,
which requires them to turn over all documents requested by regulators, and
Chinese law, which prohibits transferring data that might contain state secrets
to foreign parties. U.S. regulators have received documents on at least four com-
panies, the China Securities Regulatory Commission said in January.
PCAOB says it is close to deal
on inspecting Mainland firms
The Public Company Accounting Oversight Board said last month that the United
States and China are close to striking a deal that would allow it to inspect the
audit work of Mainland accounting firms.
Such a deal would alleviate a long-running dispute between the two global
powers regarding oversight of auditors, an issue aggravated by a series of ac-
counting scandals in recent years at U.S.-listed Chinese companies.
“I am also optimistic that we will be able, during 2014, to sign a long-sought
agreement to inspect the audit work of PCAOB-registered firms based in China,”
James Doty, the Chairman of the board, told Reuters.
Doty said later that Chinese negotiators and the board were still exchanging
draft agreements and had not decided how the inspections would be conducted.
Reuters reported that Chinese negotiators have said they would not be com-
fortable with U.S. examiners conducting inspections within China. “There are
various ways of dealing with that,” Doty was quoted as saying. “It may be that we
do not necessarily need to be on the ground.”
12 March 2014
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