China units of Big Four in settlement talks with SEC
Wednesday, June 4, 2014 at 7:28AM
Julie DiMauro in Big Four, China, Deloitte & Touche, Ernst & Young, Judge Cameron Elliot, KPMG, PricewaterhouseCoopers, SEC

The U.S. Securities and Exchange Commission said it is trying to reach a settlement with the Chinese units of the Big Four accounting firms of a long-running dispute over regulators' access to audit documents.

The SEC Monday granted a 90-day extension requested by the four firms and the agency's enforcement division for an appeal briefing. A copy of the order is here (in pdf).

The settlement talks follow an SEC Administrative Law Judge's 112-page ruling that chastised the firms for failing to share audit work that could help SEC investigators uncover accounting fraud.

In January, Judge Cameron Elliot suspended the China units of KPMG, Deloitte, PricewaterhouseCoopers and Ernst and Young for six months from auditing any U.S.- listed companies.

Judge Elliot said the firms "willfully" failed to give U.S. regulators the audit work papers of certain Chinese companies -- U.S. issuers with securities registered with the SEC -- under investigation for accounting fraud.

The six-month suspension has been on hold pending the firms' appeal before the full five-member SEC commission.

Auditors operating in China have refused to hand over audit papers pertaining to Chinese companies because of fear of violating Chinese secrecy laws.

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Julie DiMauro is the executive editor of FCPA Blog and can be reached here.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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