Press releases

WASHINGTON – Sen. John Kennedy (R-La.) today released the following statement in response to a Statement of Protocol (SOP) agreement made between the Public Company Accounting Oversight Board (PCAOB) and Chinese authorities that increases scrutiny of Chinese companies that list on U.S. stock exchanges:

“Today’s agreement between the PCAOB and Beijing is only a first step in a long journey of China’s proving that its pattern of deceit and market manipulation is over. China needs to grasp that just one deception will get its companies booted off U.S. exchanges. 

“The SEC should make no exceptions. It must allow no loopholes. We have to hold China to the same standards as every other company and every other country that lists on American exchanges. 

“This agreement only highlights the need for Congress to strengthen the integrity of our markets by passing the Accelerating Holding Foreign Companies Accountable Act without delay. It’s not time to give China any benefit of the doubt—not when Americans’ savings are at stake. It’s time to make even more certain that Beijing gives U.S. officials the information they need to keep U.S. investors safe from the schemes we’ve seen from China too many times before. The Accelerating Holding Foreign Companies Accountable Act would allow the SEC to kick lying companies off our exchanges even faster.

“Here’s our message to China: We’ve got the regulatory hammer, and we will use it without flinching,” said Kennedy. 

The SOP includes the following agreements, which Chinese authorities have committed to:

  • The PCAOB will have sole discretion to select which firms to audit.
  • The PCAOB can retain documents for inspection and investigation purposes.  Additionally, audit work must be complete without redactions.
  • The PCAOB has direct access to interview and take testimony of personnel associated with audits the PCAOB inspects or investigates.
  • The PCAOB can share all of this data with the Securities and Exchange Commission (SEC) for all SEC-related purposes, including administrative or civil enforcement actions.


  • Kennedy’s legislation, the Holding Foreign Companies Accountable Act, was signed into law in 2020 in order to protect American investors and their savings from foreign companies that operate on U.S. stock exchanges while refusing to submit to SEC oversight.
  • In June, the Senate passed Kennedy’s legislation, the Accelerating Holding Foreign Companies Accountable Act, which would increase accountability for Chinese companies that refuse to submit to U.S. financial oversight and close a loophole that Chinese companies use to avoid such oversight. 
  • Prior to the SOP agreement, China’s communist government refused to allow the PCAOB to inspect audits of companies registered in China and Hong Kong. Such companies represent a keen risk to American investors, as nearly 11 percent of all securities class action lawsuits in 2011 were brought against Chinese-owned companies accused of misrepresenting themselves in financial documents.