On the other hand, if it is determined or identified pursuant to law that certain accounting information involves any state secret and has to be provided to an accounting firm for the purpose of performing the auditing agreement, has the appropriate Chinese company listed in the U.S. filed an application with the state secret-guarding authorities for approval? In principle, any information that involves state secrets should not be disclosed to the outside. However, if the non-disclosure of such information would limit the scope of the auditing services, it can be disclosed but only with the approval of the state secret-guarding authorities.

　　If a Chinese company listed in the U.S. unlawfully discloses accounting information to an appropriate accounting firm, it would be faced with the risk of being given administrative sanctions by the state secret-guarding authorities or even being held criminally liable.

　　II. Risk of violating the Archives Law

　　In the PRC, guarding archives is also a statutory obligation for citizens, legal persons and other organisations. Article 16 of the Archives Law of the PRC[⑧] stipulates, “Collectively-owned or individually-owned archives whose preservation is of value to the state and society or which should be kept confidential shall be properly taken care of by the owners. …It shall be strictly forbidden to sell such archives for profit, or to sell them or give them to foreigners.” Article 18 stipulates, “State-owned archives and the archives specified in Article 16 of this Law as well as duplicates of such archives shall not be carried or transported out of the country without authorization.”

　　For the purpose of the above statutory obligation of guarding archives, an appropriate accounting firm should consider the following two aspects. First, the accounting information provided by a Chinese company listed in the U.S. is the main basis for the auditing arrangement and thus an important source of auditing working papers. If the above accounting information involves state secrets, are the auditing working papers resulting from such information owned by the state? If such auditing working papers are not owned by the state, are they archives “whose preservation is of value to the state and society”？ The applicable laws and regulations have not provided specifically for this yet.