Clifford Chance

SEC Releases A Provisional List Of Companies That Have Engaged Auditors Not Subject To Full PCAOB Inspection

March 17, 2022

In early March 2022, the U.S. Securities and Exchange Commission released a list, available here, that provisionally identifies five U.S. listed companies that have retained an audit firm with a branch or office located in a non-U.S. jurisdiction, which the U.S. Public Company Accounting Oversight Board has determined it is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. Each company on this list has significant operations in the People’s Republic of China. The release of this list is the latest in a series of steps taken by the SEC to implement the Holding Foreign Companies Accountable Act, available here. This briefing provides an overview of the HFCA Act and the steps that the SEC and the PCAOB have taken to implement the HFCA Act. It also discusses the SEC's related enhanced disclosure expectations as well as U.S. enforcement and private litigation risks.

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