US watchdog says problems found in Chinese company audits

A building housing the PricewaterhouseCoopers (PWC) branch office stands behind a Chinese national flag in Beijing, Jan. 24, 2014. [Reuters]

A U.S. accounting watchdog found unacceptable deficiencies in audits of U.S.-listed Chinese companies performed by KPMG in China and PricewaterhouseCoopers in Hong Kong, the government agency said on Wednesday.

The U.S. Public Company Accounting Oversight Board published the findings of its inspections after gaining access to the records of Chinese company auditors for the first time last year after more than a decade of negotiations with Chinese authorities. That access kept roughly 200 China-based public companies from potentially being kicked off U.S. stock exchanges.