Rep. Andy Barr
A bipartisan bill introduced on Dec. 14 by U.S. Rep. Andy Barr (R-KY) would hold China responsible for blocking United States officials from conducting effective oversight of China-based audit firms.
“This bill builds off of the bipartisan Holding Foreign Companies Accountable Act to protect investors, ensure the integrity of financial statements, and create a level playing field for issuers on U.S. exchanges,” said Rep. Barr, ranking member of the U.S. House Financial Services Subcommittee on National Security, International Development, and Monetary Policy.
Rep. Barr cosponsored the Accelerating Holding Foreign Companies Accountable Act, H.R. 6285, with bill sponsor U.S. Rep. Brad Sherman (D-CA) to institute a trading prohibition for certain issuers that retain public accounting firms that have not been subject to inspection by the Public Company Accounting Oversight Board (PCAOB), according to the text of the bill.
While federal law prohibits the shares of foreign companies from continuing to be listed on U.S. exchanges if a company’s auditor is not overseen by the PCAOB for three years in a row, Chinese authorities for more than a decade have blocked the PCAOB from conducting oversight of its audit firms, which now serve 191 companies publicly traded in the U.S. with a combined global market capitalization of $1.9 trillion, according to information provided by Rep. Barr’s office.
If enacted, H.R. 6285 would require foreign auditors to allow PCAOB inspections or risk publicly traded companies being delisted from U.S. exchanges if inspections do not happen after two consecutive years rather than three, the information says.
H.R. 6285 is the companion bill to the same-named S. 2184, introduced on June 22 by U.S. Sens. John Kennedy (R-LA) and Marco Rubio (R-FL) and approved on June 24 by their chamber.