backOn May 10, 2023, PCAOB Chair Erica Y. Williams praised the Holding Foreign Companies Accountable Act (HFCAA) following the PCAOB’s release of inspection reports for two audit firms based in China and Hong Kong. Chair Williams noted that the reports followed the Board securing complete access to inspect registered public accounting firms headquartered in mainland China and Hong Kong.
Chair Williams stated that the two reports, based on 2022 inspections, “show unacceptable rates of Part I.A deficiencies,” but that the high level of deficiencies indicated that the inspection process functioned as designed. Chair Williams further noted that the two firms inspected in 2022 accounted for 40% of the total market share of U.S.-listed companies audited by Hong Kong and mainland China firms, and that the PCAOB is on track to inspect 99% of the total market share by the end of this year. Chair Williams stated that, if appropriate, inspectors will refer deficiencies to the Division of Enforcement and Investigations for possible action.
Chair Williams’ statement is available here.