Switzerland and China cooperate in numerous areas. Now the two countries are moving closer together on one more issue.
Switzerland and China continue their rapprochement. China took a step toward Switzerland and rated the Swiss system of audit oversight as ‘equal’, according to research by muula.ch.
The Ministry of Finance of the People’s Republic of China communicated its decision, according to which it recognized the Swiss audit oversight system and the Swiss standards on auditing as ‘equivalent’.
This recognition by the People’s Republic of China applies both to the Ministry of Finance itself and to the Chinese stock exchange China Securities Regulatory Commission (CSRC), according to information on the website of the Swiss audit oversight authority FAOA.
This means that the two countries trust each other when it comes to the work of firms such as KPMG, EY, Deloitte and PWC in preparing annual financial statements and their quality of standards.
Swiss stock exchange benefits
The Swiss Federal Council had already taken the lead in this regard and recognized the equivalence of the Chinese audit supervisory authority CSRC in Switzerland in May 2021. With China, the number of foreign audit oversight authorities recognized by Switzerland had risen to 49.
With all of this, for example, the cooperation between the Swiss stock exchange and the Chinese stock exchanges is facilitated. At the same time the countries avoid certain duplications.
In any case, more and more Chinese shares are currently being listed as secondary listings on the SIX Swiss Exchange, as muula.ch also reported. The quality of the annual financial statements, for example, plays a role for investors.
So nothing stands in the way of mutual trust between Switzerland and China when it comes to the preparation of annual financial statements and the approval of auditors.
U.S. inspectors in Switzerland
In general, there is a lot of movement on this issue at the moment. After years of dithering, China had recently allowed the Americans to convince themselves of the correctness of the preparation of Chinese annual financial statements on site, as muula.ch also reported that historic step.
The U.S. authority PCAOB controls the quality of the annual financial statements in individual countries – practically worldwide – with its own inspectors. The Americans regularly come for those also in Switzerland.