ProfGillis

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Thanks everyone for your excellent questions. Hope to see you hear again soon.

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The markets need reform first. They are not big enough. The entire market cap of ChiNext is $100 billion - Baidu alone is half of that. And the listing process needs to become more transparent and allow these companies to come to market. The better approach is probably to sta...

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I expect the SEC is already on to that. It takes a long time before someone is brought to justice. The issue is whether they are making stuff up. Telling the truth is never wrong.

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I think the company needs to provide a comprehensive response. It probably needs to do an investigation.

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The first thing I look for is the auditor, which unfortunately is a pretty good indicator. Then I often focus on taxes - that is where you can often figure out how much they are cooking the books.

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If an auditor is deregistered by the PCAOB, it can no longer audit public companies or play a significant role in the audit of public companies. For a China firm, that means they would have to give up their U.S. listed clients and could not do work on the MNCs from the U.S. I...

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I am mostly boring and buy ETFs. I play a little, using looking for value. I was going to buy EDU the other day after reading the report, but it rebounded tod fast.

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I think the best result will come from them working together. Chinese regulators remain in charge, with the U.S. regulators in a supporting role. Together they can make these companies follow both U.S. and Chinese law, and improve audit quality.

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Worse case scenario is that the PCAOB jerks the registrations of all China based auditors. That leads to delisting of all U.S. listed Chinese stocks and big problems for MNCs. Read Chuck Schumer's letter to the PCOAB yesterday (on my blog 网页链接)

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Always tell the truth. He will never get in trouble that way.

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There is certainly value. Just how long will it take for the market to recognize that value? I think the next six months are going to be tough as we go through audit season again.

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From a fundamental valuation perspective, there are some screaming deals out there. But the overhang of fraud and regulatory challenges must make one pause.//@klukoff:对 @ProfGillis How do you now view US-listed Chinese stocks? With the price relatively low, will you consider...

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Figuring that out would require a detailed investigation. What the company needs to do is hire a top law firm and accounting firm to dig through all the deals. It will be expensive, but necessary.

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I think the U.S. regulators are desperate to make a deal, but China is playing hard to get. I think part of that is because so many of the companies that have listed in the U.S. have ignored Chinese laws to do it. China would prefer they just give up their U.S. listings and c...

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I think it really threatens the audit industry. Another big scandal for one of the Big Four might push the PCOAB and SEC over the line - resulting in the China firm being deregistered - banned from auditing public companies in the U.S.

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What is the market for U.S. listed Chinese companies down over the last year? 40%? That is a real threat and a lot of that is over fraud, as well as risky structures.

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I do think that cleaning up the audit sector will help. I think PCAOB inspections will weed out weak auditors and make the rest of them do a lot more work.//@klukoff:对 @ProfGillis Is there an end in sight to the recent rash of short-seller reports? What kind of regulatory me...

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If I were on Focus Media's board I would want an independent board committee to investigate. That committee would hire a top tier law firm and accounting firm and find the truth. It would cost a fortune, but it is the only way to put this to bed.//@klukoff:对 @ProfGillis Do y...

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I think eventually there will be criminal charges. Right now the SEC is still building the case and trying to figure out everyone who was involved. That is why they are so anxious to review Deloitte's role.