Accountancy
International Perspective

What does the trade war mean for accounting? ... Postings The China Hustle » ... Donald Trump has declared a trade war against China by threatening higher import tariffs on $153 billion of Chinese exports. China has said it is only polite to reciprocate.

Burgess COMMENTARY
I qualified as a Chartered Accountant in London in 1965. My impression is that what was an important and respected profession has become a highly competitive and contentious business that is now failing in its primary mission of ensuring that financial information flows reflect reality. I am of the view that professional accountancy has enormous potential to help make the world a better place because of its power to enable accountability, not merely being just another way to extract wealth from those that really work to create the wealth. Peter Burgess ... http://truevaluemetrics.org
Peter Burgess

China Accounting Blog News and opinion on accounting in China. What does the trade war mean for accounting? Postings The China Hustle » Donald Trump has declared a trade war against China by threatening higher import tariffs on $153 billion of Chinese exports. China has said it is only polite to reciprocate. Services are not subject to import duties, but China has shown no qualms about punishing foreign business for the sins of their government. The Big Four are technically not American companies. The operations in China are not subsidiaries, but more like franchises owned and operated mostly by local Chinese. But they are generally viewed as American and may face regulatory crackdowns and may see an acceleration of the process of transferring major accounts to local CPA firms. Some smaller US CPA firms operate in China in ways that are technically illegal under Chinese law and would be easy to crack down on. It would be easy for the Chinese to crack down on the Big Four. They simply need to strictly enforce their own rules. Few audits can survive a critical examination by regulators, evidenced by the high rate of audit deficiencies identified during inspections by the Public Accounting Oversight Board (PCAOB) of domestic firms. Earlier this year China temporarily banned several local firms for audit deficiencies. The Big Four had best watch their back. The Big Four will likely also suffer from a decline in business serving US multinationals. All multinationals must carefully reexamine their global supply chains and some of the China business is going elsewhere even if this spat is settled. Even if this dispute is settled, it has highlighted the risk of overreliance on the Chinese market. The US is in a good position to retaliate. There has been a long simmering dispute over the ability of the Public Company Accounting Board to inspect Chinese accounting firms, including the Chinese members of the Big Four. The PCAOB has been unwilling to go to the mat over this issue and their behavior is the kind of appeasement that Trump has accused prior administrations of conducting. Strict enforcement of US laws would lead to the deregistration of Chinese accounting firms registered with the PCAOB and the consequential delisting of Chinese companies from US capital markets. Like Trump’s trade war, that would hurt Chinese accounting firms (mostly the Chinese member firms of the Big Four), but also US investment banks, stock exchanges and law firms that benefit from US listings. Those listings would inevitably move to Hong Kong. Buckle your seatbelts. Subscriptions Subscribe to China Accounting Blog by Email RSSSubscribe to RSS feed April 2018 March 2018 February 2018 December 2017 November 2017 September 2017 August 2017 July 2017 June 2017 March 2017 February 2017 January 2017 November 2016 October 2016 September 2016 August 2016 July 2016 June 2016 May 2016 April 2016 March 2016 February 2016 January 2016 December 2015 November 2015 October 2015 September 2015 August 2015 July 2015 June 2015 May 2015 April 2015 February 2015 January 2015 December 2014 November 2014 October 2014 September 2014 August 2014 July 2014 June 2014 May 2014 April 2014 March 2014 February 2014 January 2014 December 2013 November 2013 October 2013 September 2013 August 2013 July 2013 June 2013 May 2013 April 2013 March 2013 February 2013 January 2013 December 2012 November 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2011 April 2011 March 2011 February 2011 January 2011 December 2010 November 2010