Bernstein: Our business principally consists of auditing Chinese companies that are publicly traded on U.S. exchanges and U.S. companies with operations in China. But we also perform due diligence for investors and companies looking to invest in China. And we have recently begun assisting more Chinese investors to make investments here in the U.S., for instance, with immigration matters relating to the EB-5 program. This is a trend that is growing very fast.

Editor: What challenges do auditing firms face in China?
Bernstein: Auditing in China is completely unique, certainly unlike auditing in Western developed economies and probably different from any of its counterparts across the world. The most immediate and obvious challenges for auditors are time, distance, language, and culture. Auditors working from the U.S. are functioning within a 12- to 13-hour time difference and managing a physical distance of 7,500 miles from either U.S. coast, a monumental hurdle when you consider the requisite travel time and expenses. While obvious on its face, the language barrier takes on greater significance in light of the burgeoning numbers of highly educated people who speak Chinese as their first language. For example, I have noticed during many speaking engagements at universities that a very small percentage of non-asian students speak Chinese, despite its being the most-used language in the world. When I was in college, if you wanted to learn a second language, it was likely Spanish or French. No question today that the most valuable second language to acquire is Mandarin, although it’s far from easy to learn.

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