Many of the audits, even of State-Owned companies, are signed off by the Hong Kong offices of the larger accounting firms. China might now ban this practice, where mainland auditing teams would anyway do most of the work, writes accounting expert Paul Gillis at his weblog.
PWC is auditing Alibaba, but – writes accounting professor Paul Gillis at his weblog – it is very unclear whether the Hong Kong or the mainland offfice of PWC is doing the legwork. Officially it is the Hong Kong office, but Gillis has its doubts, and that might matter to the investors.
VIE structures are highly scrutinized and Beida professor Paul Gillis is fighting those structures via the Cayman Islands and other tax havens, although they need economic reforms to be iradicated. On his accounting website he looks at the IPO document Alibaba had to file and awards them the golden VIE standard.
Relaxing capital controls is needed fast, argues Beida professor Paul Gillis at his accounting weblog, as he analyses the position of Chukong Holdings Limited. They filed last week for a US IPO, but also use a so-called variable interest entity (VIE) structure, a source of many problems, argues Gillis.