The SEC and PCAOB have issued a joint statement urging companies to disclose financial reporting and other risks associated with operations in emerging markets. The statement also addresses both agencies’ continued focus on the importance of high quality financial information in China and other emerging markets.
In recent years and for the foreseeable future, the SEC and PCAOB have been constrained from providing regulatory oversight and enforcement of non-US companies and their management in emerging markets, including China.
Because of this, the SEC and PCAOB continue to stress the importance of providing high quality, reliable audited financial information and risk disclosures for companies based in, or with significant exposure to, emerging markets.
In a joint statement, leaders of both agencies summarized the risks and related considerations to issuers, auditors, index providers and investors that are associated with these emerging markets.
This joint statement follows other statements made by the SEC and PCAOB, expressing their expectation that companies make these disclosures.
Statement on the vital role of audit quality and regulatory access to audit and other information internationally—discussion of current information access challenges with respect to U.S.-listed companies with significant operations in China