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Tag: accounting

US-China audit fight: Armageddon averted?

May 17, 2013 12:59am by Pan Kwan Yuk
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Remember the tiff between US and Chinese regulators over accounting regulatory standards? You know, the one that resulted in the SEC charging the Chinese affiliates of the Big Four audit firms (plus BDO) with violating US securities law after the five firms allegedly refused to turn over audit work related to nine Chinese companies being investigated for potential accounting fraud?

Well, after a 10-month stand off, it looks like some progress is finally being made to avoid an accounting Armageddon that could have led to the wholesale delisting of Chinese companies on US stock exchanges. Continue reading »

Tags: , , , , Posted in Asia, China |

Guest post: why international lawyers should head for Africa

Apr 4, 2013 3:53pm by beyondbrics
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By David Mitchell of BDO

Africa is experiencing rapid economic growth and infrastructure development. In addition to the huge investment programmes, there is a strong pipeline of M&A activity and an increasingly sophisticated and growing financial and professional services industry.

With a strong demand for more British and international lawyers to go and work in Africa to help facilitate this, the opportunity for lawyers and accountants at any stage in their careers, whether newly qualified or senior partners, has never been better. Continue reading »

Tags: , , , , Posted in Africa |

China: shining a light at the machinery

Feb 6, 2013 5:00am by Paul J Davies
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January was a scary month for China’s machinery makers and their investors. First, Zoomlion was accused by a “concerned investor” of booking phantom sales, then Caterpillar accused its own recently-acquired Chinese subsidiary of accounting misconduct and took a $580m write down on the value of the deal.

Time for a ghostbusting analyst to bring some rational rigour to the sector. Continue reading »

Tags: , , , , , Posted in China |

Guest post: A solution for China v SEC

Dec 11, 2012 8:08am by beyondbrics
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By Paul Gillis of Peking University

The SEC last week charged the Chinese affiliates of Ernst & Young, PwC, KPMG, Deloitte Touche Tohmatsu and BDO with violating US securities law after the five firms allegedly refused to turn over audit work papers related to nine Chinese companies that are being investigated for potential accounting fraud.

But the accounting firms may not have the most to worry about. The action could lead to Chinese companies being kicked off US stock exchanges. Continue reading »

Tags: , , , Posted in Asia, China |

Baidu, Sina drop on SEC/China accounting impasse [updated]

Dec 4, 2012 8:39pm by Pan Kwan Yuk
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The clash between the US Securities and Exchange Commission and China over accounting regulatory standards probably won’t come to a head for another ten months. But the prospect that the SEC’s high-profile attack on the Chinese affiliates of the Big Four and BDO could lead to a wholesale delisting of Chinese companies from the US stock market appeared enough to spook investors. Continue reading »

Tags: , , , , , Posted in Asia, China |

Paul Gillis: mass delisting risk in US/China accounting scandal

Jul 3, 2012 10:04am by Stefan Wagstyl
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Investors who hope the accounting scandals involving US-listed Chinese companies will soon fade away should think again.

That’s the message from Paul Gillis, a Beijing-based accountancy expert.  He says that there’s only a 10 per cent chance that the regulatory issues raised by the affair will be quickly resolved, a 70 per cent chance that the arguments will be “kicked down the road”, and a full 20 per cent chance of a Beijing-Washington bust-up which ends with the US forcing the delisting of American-listed Chinese stocks.

That would have repercussions far reaching far beyond the companies involved and their disgruntled shareholders. Continue reading »

Tags: , Posted in China |

VIE: an acronym every investor in Chinese companies should know about

Apr 2, 2012 9:08pm by beyondbrics
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By Alexandra Stevenson

When considering the risks of investing in Chinese companies, Sino-Forest typically comes to mind. Investors got burned for not probing its opaque accounting. But there is also a fully-disclosed accounting detail that investors in Chinese companies would do well to get acquainted with.

It’s called variable interest entity (VIE). Continue reading »

Tags: , , , , , Posted in Asia, China |

KPMG Forensic backs China’s Silvercorp

Oct 26, 2011 12:54pm by Denise Law
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Short-sellers beware: shares in Toronto-listed Silvercorp Metals, the Chinese silver miner accused of fraud, are up more than 16 per cent in the past two days after it said earlier this week that KPMG Forensic published a report backing its financials. Continue reading »

Tags: , , , , , Posted in China, Global |

Guest post: China’s mutant turtles

Aug 3, 2011 10:52am by beyondbrics
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By Shaomin Li and Seung Ho Park of the Skolkovo Institute for Emerging Market Studies (SIEMS)

Behind the latest accounting scandals in many foreign-listed Chinese companies lies a widespread problem of data manipulation. It is nicely summed up in a modern Chinese parable: a locally-listed food company makes up a news release saying a flood washed away its turtles – a Chinese delicacy – and later issues another saying the turtles swam back when the flood receded. But the problem also shows up in hard numbers.

Continue reading »

Tags: , , , , , , Posted in Asia, China |

Yurun: escaping Muddy Waters?

Jun 29, 2011 7:51am by Josh Noble
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Hong Kong-listed Yurun has been one of  a string of recent casualties of the Muddy Waters saga – despite the fact that the short-seller has yet to utter a word on the Chinese meat producer.

The old adage of ‘buy on a rumour, sell on a fact’ appears to have turned on its head. Continue reading »

Tags: , , , , , , Posted in China |

Sino Forest: smoke or fire?

Jun 15, 2011 12:48pm by Alexandra Stevenson
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After weeks of allegations from short-seller Muddy Waters, Sino Forest held an analyst call on Tuesday in a bid to assuage the concerns of investors – who have watched the share price plummet 70 per cent in recent weeks – and to announce first quarter earnings.

Maybe it was the awkward way in which a few analysts’ questions were cut off, or the way some questions were ignored entirely, that unsettled the market:  immediately after the call, the stock fell 12 per cent on the Toronto Stock Exchange. It closed down 32 per cent.

Continue reading »

Tags: , , , , Posted in China |

BB: time to register

Dear beyondbrics readers,

After more than three years of fully open access, we are taking the step of asking our readers to register on FT.com to read our articles. Beyondbrics will still be free but we'd like to know a bit more about you, our readers. Other FT blogs (including Alphaville) already do the same thing. Registration is active on beyondbrics from May 6.

Many of you are already registered on FT.com, or are subscribers - in which case, if you are logged in to the site you will not notice any difference. Just carry on as before.

For those of you not yet registered, it's a simple process which only takes a few moments.

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Many thanks

Stefan Wagstyl, emerging markets editor

Global equities macromap

Number of the day

-0.2% Fall in Polish retail sales in April, rather worse than 1.1 per cent growth expected.

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