SEC Initial Ban On Us Accounting Institutions: Suspected Fraud For Listing Stocks

< p > with the recent upsurge of listing in the US, the integrity of the stock market has surfaced again.

Recently, the US Securities and Exchange Commission (SEC) first banned an accounting firm from the United States for providing services to Chinese Listed Companies in the United States.

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< p > in fact, since 2010, the special committee of the securities and Exchange Commission (SEC) has set up a special group to investigate the Chinese companies listed in the United States, and a number of "stocks" companies have been suspended and even punished for delisting because of financial fraud.

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< p > < strong > audit is not responsible for being "shut down" < /strong > /p >

"P" yesterday, SEC announced that EFP EFP Rotenberg LLP, a New York accounting firm, was prohibited from providing audit services to Chinese companies listed in the US because of its misconduct when it audited the China travel world Holdings Group (China s Universal Travel Group) (hereinafter referred to as the "Journey World").

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< p > SEC said in the administrative litigation report that EFP did not make the necessary audit plan when auditing the journey world, and did not get sufficient evidence or give sufficient professional questioning when giving the company financial statements "health" assessment.

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< p > meanwhile, SEC pointed out that when the accounting firm previously provided audit services for the travel world questioned the operation of the company, EFP did not attempt to communicate with the previous accounting firms when it took over the audit of the world.

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P, a person familiar with the matter, is the first time such a targeted ban has been implemented in the history of SEC, especially for auditing services provided by Chinese companies.

And EFP was not the first accounting firm to be dragged down by the "travelling world".

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< p > November 2013, another accounting firm Acquavella, Chiarelli, Shuster, Berkower &Co., LLP (ACSB), which had provided audit services to the world of travel, was also punished by the US market regulator for its flaws in the audit process, and the company was prohibited from conducting the audit of listed companies within two years.

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< p > "First Financial Daily" reporter noted that during the 5 years after the listing of the United States, 3 chief financial officers (CFO) were replaced, and 3 accounting firms were replaced in the 8 months from September 2010 to April 2011. EFP began to provide audit services for them when they announced the withdrawal from the NYSE in the travel world.

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< p > < strong > unclear "Chinese stocks" < /strong > < /p >.

Less than P, the early development of China's stock market has been ups and downs.

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< p > The Journey World was established in 1998, and was listed on the NASDAQ OTCBB market in July 2006. It was officially listed on the New York stock exchange in 2009.

The company's first quarter and second quarter performance report released in 2010 showed that its revenue increased by 68.5% and 99.6% respectively.

Revenue in the first three quarters of 2011 also reached $108 million 500 thousand, an increase of 10.9% over the same period of 97 million 800 thousand dollars in the same period last year.

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Less than P, the travel world also attracted more doubt when the scenery was boundless. After investigating it, SEC pointed out that the financial reports submitted by the travel world greatly exaggerated the company's income, cash balance and net profit.

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< p > when the stock market broke out in 2012, the world announced in April 17, 2012 that it would voluntarily withdraw from the New York stock exchange. In May of the same year, the company announced that it would carry out stock trading in the pink market.

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In 2013, September, when SEC accused the world of traveling to the United States in 2006, it bought a stock company that had already been publicly listed, thus avoiding the scrutiny of P.

In addition, SEC pointed out that the itinerary did not disclose why it pferred $41 million of cash from us listed pactions to unnamed entities in Hongkong and the mainland of China.

The Committee cancelled its listing qualifications in the United States because of its failure to submit annual and quarterly earnings reports.

Eventually, the world was reconciled with SEC's charges and fined 935 thousand dollars.

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< p > the development process of the journey to some extent represents some of the problems existing in China's stock market.

In the past few years, many Chinese companies listed in the US have been accused of accounting or information disclosure problems. Regulators have previously accused a minority of American audit firms for not properly auditing these Chinese enterprises.

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At the beginning of this year, SEC once again refused to provide some clients' working papers to assist in the investigation of counterfeiting, because of the four largest accounting firms (hereinafter referred to as the "four largest") in the world, and gave the "four big" suspension to audit the six month review of the US listed companies in P.

The four largest joint appeal against SEC was appealed.

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< p > an insider told the first financial daily that at present, the audit of the "four big" Chinese enterprises listed in the United States has not been affected, and has been carried out as usual.

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< p > in addition, the "four big" is also actively coping with the supervision of SEC.

"At least one of the four big companies has compromised with SEC and handed over the client's manuscript.

The four party can also choose its American branches to undertake the audit of Chinese enterprises listed in the United States, and then reach an internal agreement with China, which is responsible for the specific audit work of China. "

Insiders said.

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