Exclusive: Talks set with China on audit documents - U.S. official

NEW YORK (Reuters) - U.S. authorities have completed their first observations of official auditor inspections in China and expect to meet soon with Chinese officials, said the head of the U.S. watchdog that oversees corporate auditors on Thursday.

The upcoming meetings will focus on access to audit documents and could result in a "major breakthrough," though obstacles remain, said James Doty, chairman of the Public Company Accounting Oversight Board, in an interview.

"The fact that it is a serious discussion with decision-makers who are aware of the complexities of the issues on both sides is new," Doty said.

The PCAOB has been trying for years to gain access to China to address a rash of accounting scandals at Chinese companies listed on U.S. stock exchanges.

Over the past two years, U.S. investors have lost billions of dollars on China-based companies listed on U.S. exchanges after questions were raised about the companies' accounts.

China has blocked the PCAOB's attempts to inspect audit firms there, but decided earlier this year to let PCAOB inspectors observe Chinese authorities' own audit inspections.

The first of the observations took place in late October, but there is still no deal in sight to allow the U.S. to do joint inspections with the Chinese, Doty told Reuters.

The observations were a step forward in building confidence and credibility on both sides, Doty said.

China has also resisted the release of audit documents to the United States, citing its state secrets law.

Officials of China's Ministry of Finance and the China Securities Regulatory Commission are expected to travel to Washington before the end of the year to discuss the delivery of documents, Doty said. "These are very serious, significant steps for them to take, given where we started," Doty said.

(Reporting by Dena Aubin; Editing by Kevin Drawbaugh and Carol Bishopric)

Source: http://news.yahoo.com/exclusive-talks-set-china-audit-documents-u-official-204512715--business.html

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