Sino-US audit deal hailed, but questions remain(3)

One unresolved issue comes in worries whether file-sharing can be as effective as field inspections to ensure quality audits.

Paul Gillis, a professor at Peking University and a member of the PCAOB's Standing Advisory Group, expressed doubt whether the deal would address accounting problems at Chinese companies.

The deal has no direct impact on the SEC lawsuits as it is not party to the signed memo and will have to conclude a separate deal, Gillis said.

In December, the SEC charged the auditors amid a wave of fraud accusations against China-based companies listed in the United States, and in the past few months, Chinese companies' listings have been de facto frozen in the United States.

Neither does the deal have any impact on reopening the US markets to Chinese companies wishing to conduct initial public offerings (IPOs). The SEC, not the PCAOB, decides whether to permit an IPO to proceed, according to Jacob S. Frenkel, who spent 10 years as an attorney in the SEC's Division of Enforcement.

"The SEC very much wants to send a message that it believes there was widespread fraud, including false financial statements and fake transactions, in the Chinese companies that traded in US markets," Frenkel said.