Drew Bernstein, Co-Managing Partner of Marcum Bernstein & Pinchuk, Quoted in The Deal Pipeline Article “Chinese arms of Big 4 auditors banned for 6 months

The Chinese arms of the Big Four accounting firms were barred for six months from leading audits of U.S. registered companies, after failing to turn over audit documents requested by the Securities and Exchange Commission.

As a practical matter, U.S. registered companies in China using the censured auditors will now need to find other firms to do the work. Delays in finding new auditors could cause companies to lose their listings on U.S. stock exchanges or to have their stock registrations revoked by the SEC.

“They are going to have to figure out some work-arounds for the clients of the Big 4,” said Drew Bernstein, co-managing partner of the audit firm of Marcum Bernstein & Pinchuk LLP. “Either give them extensions or maybe the U.S. firms will sign off on the audits and hire the China firms as consultants.”

“Whatever happens, if the China auditors are at all involved with audit work, they are going to have to be heavily supervised,” Bernstein said.

“Everyone is frustrated with China,” Bernstein said. “You can’t get at the companies. You can’t get at the assets. You can’t get to the directors’ and officers’ insurance because there isn’t any. At the end of it, the accountants are the only ones left, and somebody has to take responsibility.