Timeline: U.S., HK regulators struggle to get China audit papers

BEIJING (Reuters) - Several current and former KPMG partners are facing contempt proceedings in a Hong Kong court, as liquidators for failed U.S.-listed China Medical step up their action against the auditor over its refusal to produce Chinese working papers.

FILE PHOTO: The offices of auditors KPMG are seen in Cape Town, South Africa, September 19, 2017. REUTERS/Mike Hutchings/File photo

The case highlights a long-running tussle between China, which is reluctant to hand over mainland documents, and overseas regulators that demand such papers - leaving auditors trapped between upsetting Beijing or facing offshore penalties when dealing with foreign-listed Chinese firms.

Following is a timeline of attempts by regulators in the U.S. and Hong Kong to obtain audit documents from the mainland.

2010: The Public Company Accounting Oversight Board (PCAOB) seeks inspections of China-based audit firms and the mainland affiliates of the Big Four accountancies - Deloitte, KPMG, PricewaterhouseCoopers and EY.

China refuses to provide PCAOB with access.

Oct 2010: The PCAOB stops approving new applications from audit firms in China.

2011-2013: PCAOB, the U.S. Securities & Exchange Commission (SEC), China’s Ministry of Finance (MOF) and China Securities Regulatory Commission (CSRC) discuss joint inspections of accountancies undertaking audits for U.S.-listed firms.

Aug 2012: Hong Kong’s Securities and Futures Commission commences proceedings against EY Hong Kong for failure to produce accounting records related to Standard Water held by EY’s mainland unit.

Oct 2012: China allows PCAOB to observe the audit inspections of Chinese authorities

Dec 2012: SEC charges Chinese affiliates of the Big Four accountancies and BDO with securities violations for failure to produce documents.

May 2013: PCAOB reaches a non-binding deal for cooperation with MOF and CSRC on exchange of audit documents in some cases. Talks on cross-border inspections continue.

June 2014: Hong Kong SFC notes that EY had produced Standard Water documents.

June 2015: U.S. Treasury Department reports that regulators from the United States and China committed to a pilot inspection programme of auditors in China

Feb 2015: SEC settles with China-based affiliates of the Big Four accountancies. Each agreed to pay $500,000.

Nov 2015: PCAOB requests Chinese affiliates of the Big Four firms to hand over some data by early December 2015 after the latest round of negotiations with Chinese regulators stalls.

Feb 2016: Hong Kong High Court orders KPMG to produce audit papers and other records for China Medical Technologies.

Dec 2016: PCAOB confirms registered auditors must comply with PCAOB document presentation rules.

July 2017: PCAOB censures and revokes the registration of Crowe Horwath (HK) CPA Ltd for failure to produce audit papers.

November 2017: PCAOB bans HK audit firm Anthony Kam & Associates, and Anthony Kam, for five years for violating securities laws, PCAOB rules and auditing standards in relation to the audit of Sino Agro Food, Inc.

Reporting By Matthew Miller; Editing by Himani Sarkar