By Samuel Shen and Dena Aubin

China's securities watchdog said it is ready to turn over audit documents of a Chinese company listed in the United States to U.S. regulators, signalling the latest breakthrough in a two-year international dispute over accounting scandals.

The U.S. Securities and Exchange Commission has been struggling to obtain papers from China to investigate possible accounting fraud at dozens of Chinese companies listed on U.S. stock exchanges. China has, for years, resisted turning over documents because of state-secrets and sovereignty concerns.

The China Securities Regulatory Commission (CSRC) is now ready to transfer audit papers to the SEC, and the Public Company Accounting Oversight Board (PCAOB), a CSRC spokesman said, confirming local media reports. He did not identify the company in question, or say when the handover will take place.

The gesture reflects China's willingness to improve cooperation with U.S. regulators, coinciding with high-level bilateral economic talks in Washington. It could also help restore confidence in China-based companies listed on U.S. exchanges and make it easier for firms in China to start tapping American capital markets again.

"If the SEC and CSRC are indeed singing from the same songbook on this and have found a way to resolve their stand-off over Chinese audit work papers, the capital markets will be safer for investors and a new era of cross-border comity between the world's leading economies may have dawned," said William McGovern, a partner at Kobre & Kim law firm in Hong Kong.

The stand-off between U.S. and Chinese authorities over accounting regulation has taken on an increasingly high profile, with global audit firms and major business groups and politicians calling for resolution.

The release of documents to the SEC would mark the second breakthrough in the accounting spat. In May, China agreed to turn over documents to the U.S. audit regulator, the PCAOB, under certain circumstances, though no papers have actually been transferred.

Giving the SEC direct access to documents would allow much broader investigations of accounting frauds. The PCAOB has oversight only of auditors, not the companies committing financial fraud.

The CSRC's decision was first reported by the official China Securities Journal and the Shanghai Securities News.

Market shutdown

The U.S. capital markets all but shut down to China-based companies after investors lost billions of dollars to alleged accounting frauds in China since 2010.

Scores of China-based companies have already been delisted from U.S. exchanges and new listings have slowed to a trickle.

The CSRC spokesman urged overseas regulators to punish ill-intended short sellers and protect the interests of overseas-listed Chinese companies and their shareholders.

The spotlight has also been thrown on the world's top five accounting firms, which audited the financial statements of the U.S.-listed Chinese companies.

In December, the SEC charged the Chinese affiliates of accounting firms Deloitte, KPMG, PricewaterhouseCoopers, BDO and Ernst & Young with securities violations for refusing to produce documents.

The firms said they could be prosecuted for violating state-secrets law if they released the papers. An administrative trial on the case kicked off on Monday.

The SEC did not immediately respond to a request for comment. It was not immediately clear how the release of documents would affect the SEC case.

"The timing is very interesting," said Brian Burke, counsel for Shearman & Sterling in Hong Kong. "Now on one side of the globe there is an apparent thawing of what has been a very tense relationship, and yet in the United States, the SEC is still going full-steam ahead against the auditing companies without relenting."

The CSRC spokesman said that after papers are handed to U.S. regulators, there would be no legal basis to prosecute the accounting firms.

The matter is also expected to be addressed at the two-day U.S.-China talks in Washington starting on Wednesday.

One key unresolved issue is U.S. access to inspect audit firms in China.

Obtaining documents for SEC probes is a partial measure, but it will be difficult to prevent frauds without audit inspections, said Brian Fox, president of Confirmation.com, a Brentwood, Tennessee firm that provides confirmation services for audits.

"It's good to know in hindsight that fraud was happening but it doesn't do much good for U.S investors," he said.

中国证监会首次向美国监管机构提供中概股公司会计底稿

在与美国签署相关合作备忘录两个月后，中国证监会已完成一家中资概念股公司的会计底稿整理工作，并准备向美国证监会提供底稿，这是其首次对外提供会计底稿，标志着两国会计审计跨境执法合作迈出重要一步。

近年来，美国做空机构频频将目标瞄准中国公司，开始了做空中概股浪潮，引发大面积抛售，一批中概股停牌乃至私有化。数据显示，相比2010年全年40多家中国企业在美国首次公开发行(IPO)的顶峰时期，不到两年时间，不仅赴美上市企业骤减，一些中概股涌起一股私有化退市潮。

值得注意的是，中概股遭做空也引起美国证监会注意。由于无法取得相关公司的审计工作底稿，美国证监会对有关的会计师事务所提起了诉讼，导致在美上市的中国公司再次遭遇信任危机。

上海证券报周二引述中国证监会负责人称，境外监管机构可以通过监管合作渠道向中国提出协查请求。在中国证监会提供会计工作底稿后，美国起诉五大会计师事务所理由就不存在，美国应妥善处理涉及诉讼问题。监管合作渠道的畅通，将有效解决中美会计跨境审计监管的有关纠纷。

该负责人同时表示，下一步，对于美方及其他国家有关部门提出的相关请求，履行相关程序后也会予以满足。另外，此次提供会计底稿还表明了中国证监会在打击证券期货市场犯罪、维护市场诚信，保护投资者利益的决心和信心。

报导并引述业内专家指出，根据中国有关法律法规，未经监管部门许可，中国会计师事务所不得擅自向境外提供会计底稿，必须通过监管合作渠道才能提供。

今年5月，中国证监会、中国财政部与美国公众公司会计监察委员会签署执法合作备忘录，正式开展会计审计跨境执法合作。

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