It appears to be a classic case of good cop, bad cop designed to maneuver a recalcitrant adversary, while the Public Company Accounting Oversight Board (PCAOB), America’s accounting industry watchdog, is conciliatory when negotiating with Beijing over access to audit documents for US-listed Chinese companies, the Securities Exchange Commission (SEC) is wielding a big stick.

“It’s important to recognize that the ruling indicates a governmental disagreement, not just a jurisdictional issue,” says Drew Bernstein, co-managing partner of Marcum Bernstein & Pinchuck (MBP). “It sends a clear message to both the Chinese and the US governments that the people working in the China space are getting very upset so US regulators feel pressured to get something done through the jurisdictional system.”

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