Sino-US audit deal hailed, but questions remain(2)

Auditors of US-listed companies are also legally obliged to be inspected by the PCAOB, which has the power to deregister auditors.

But the auditors maintained that they could not produce such documents as their hands were tied under Chinese laws.

Ernst & Young, one of the "Big Four," described the agreement as a significant step forward in cross-border cooperation.

Other members of the group -- PricewaterhouseCoopers, KPMG and Deloitte -- also welcomed the news, saying that the issue could only be resolved between the two governments.

"This agreement with China is an important step toward cross-border enforcement cooperation that is necessary to protect the interests of investors in US capital markets," said PCAOB Chairman James R. Doty.

"We believe a cooperative working relationship of the regulators is in the best interest of the capital markets and the profession," said KPMG in an email statement.

QUESTIONS LINGER

Though this move has been hailed by members of the profession, experts have noted that significant challenges remain to be tackled in further talks between China and the United States.