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SEC Chairman Clayton, PCAOB Chairman Duhnke, and Members of SEC Staff Meet With Auditing Firm Representatives to Discuss Audit Quality in Emerging Economies and Markets


Washington D.C., Nov. 4, 2019 —

The Securities and Exchange Commission today announced that SEC Chairman Jay Clayton, Public Company Accounting Oversight Board (PCAOB) Chairman William Duhnke, and members of the SEC staff met last week with senior representatives of the four largest global network auditing firms to discuss the audit quality and certain of the challenges faced in auditing public company operations in emerging markets, including China, the largest emerging market economy.[1]  The discussions emphasized the need for effective and consistent global firm oversight of member firms, including those operating in emerging markets.  The discussions also focused on the design and implementation of audit procedures that are tailored to reflect changes in risk.

This dialogue, which is ongoing and involves the staffs of the SEC and the PCAOB, is also a component of the efforts to address the issues highlighted previously by Chairman Clayton, Chairman Duhnke and the SEC Chief Accountant in their Statement on the Vital Role of Audit Quality and Regulatory Access to Audit and Other Information Internationally.[2] 

[1] Investors, including U.S. investors, have significantly greater exposure to emerging market economies today than they did ten and twenty years ago.  For example, as of December 31, 2018, the MSCI ACWI index allocated 11.9% to emerging markets, including 3.6% to China.  Eighteen years ago, in 2001, the emerging market allocation was 4.7%.


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