In a major breakthrough amid Chinese companies delisting from the US stock market, Washington and Beijing on Friday signed an agreement to “inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong,” EDNews reports citing Yeni Safak.

The Public Company Accounting Oversight Board (PCAOB), based in Washington, said in a statement that it signed a Statement of Protocol with Chinese authorities, “taking the first step toward complete access for PCAOB to select, inspect and investigate in China.”

The agreement was signed by the PCAOB, the China Securities Regulatory Commission, and the Chinese Ministry of Finance.

PCAOB chair Erica Y. Williams said: “The agreement signed today grants the PCAOB complete access to the audit work papers, audit personnel, and other information we need to inspect and investigate any firm we choose, with no loopholes and no exceptions. But the real test will be whether the words agreed to on paper translate into complete access in practice.

“Today, I directed the PCAOB inspection team to finalize their preparations to be on the ground by mid-September so we can put this agreement to the test.”

The PCAOB has been established by the US Congress to oversee the audits of public companies to "further the public interest in the preparation of informative, accurate, and independent audit reports."

It also oversees the audits of brokers and dealers registered with the Securities and Exchange Commission, as well as compliance reports filed pursuant to US federal securities laws.

The PCAOB will have the “sole discretion to select the firms, audit engagements and potential violations it inspects and investigates – without consultation with, nor input from, Chinese authorities,” he added.