Big 4 accounting firms refuse to hand over auditing information:

[The Straight Story]

US charges 'Big Four' accountants over China

The US financial regulator has charged the Chinese units of five accounting firms - including the so-called Big Four - over refusing to hand over auditing data on China-based companies.

The companies are under investigation by the Securities and Exchange Commission for "potential accounting fraud against US investors".

...

Claims of fraud and questionable auditing standards at several US-listed Chinese companies, for example Sino-Forest Corporation, have dented investor confidence.

The scandals have prompted US regulators to react by demanding access to auditing documents kept in China by accounting firms.

China's state law says that Chinese company records can be claimed as state secrets. The firms have cited this in refusing to release their records.

http://www.bbc.co.uk/news/business-20587401

[Uben]

1. Okay, then no business in U.S.

Dont wanna hand over the records? Then you can no longer do business in the U.S. and all assets held here will be seized. Why isn't this what they are being told?

[Egalitarian Thug]

2. How many times do these firms have to be busted before we do something?

& R

[laundry_queen]

3. Not only does Chinese law state you can't remove audit working papers from the country

but their law also states that you can't have a non-Chinese regulators conduct inspections (of audits) in China. So basically, everything is secretive and any financial statements from a Chinese company listed on the NYSE cannot be trusted. This has been going on for awhile - the PCAOB (public company accounting oversight board - created by the Sarbanes-Oxley act) has been after China for awhile, since there have been fraud allegations before. They were supposed to have come to an agreement recently for increased oversight, but this sounds like that isn't happening. NYSE should kick those companies off the exchange. I also don't know why the big four accounting firms would even take the risk - they knew the rules in China. Guess they didn't learn after Arthur Andersen.