Grant Thornton CEO talks about China-US cross-border auditing in his interview in China

Ed Nusbaum, CEO of Grant Thornton International Ltd (GTIL hereafter) was interviewed by China Business News and Shanghai Securities News in his recent visit to China. Ed shared his insight on cross-border auditing cooperation between China and US during the interview and also shared his opinions on Chinese businesses going public in the US.

Based on the recent dispute between China and the US over cross-border auditing, Ed shared his view in its recent development and the international practice dealing with such dispute and also made a remark regarding Chinese businesses in the U.S. and the responsibilities of Chinese-based accounting firms involved in the process.

“Cross-border auditing arises from the globalization of business operation, and it’s a result of the development of capital market. We believe it would be much easier for Chinese companies to go public in U.S. if a bilateral agreement could be reached on information disclosure between Chinese and US regulatory bodies. ”Ed said.

Ed also stressed that the proper functioning of a capital market system requires the involvement of many aspects. A healthy internal control system should be in place within the company, the top management of the company should be held accountable for financial information, an efficient internal oversight and governing system was also required, and the auditors should also be held accountable for the accuracy of the financial information disclosed. In addition, unified rules need to be established to ensure the regulators have proper oversight towards the market operation.

Regarding the trust crisis at the end of year 2012 against Chinese businesses listed in the US, Ed said that a recent survey conducted by GTIL shows that US investors' optimism is rising and they are still willing to invest in Chinese businesses, so it’s the right time for Chinese businesses to go public in the US as long as they provide accurate financial information. Ed believed that the IPO slowdown of China businesses was temporary and will bounce back.