Drew Bernstein

    Recent Posts

    SPACs | A Guide for Management

    While special purpose acquisition companies (SPACs) have existed since the early 1990s, these investment vehicles have gained popularity in recent years. SPAC IPOs have raised over $49 billion thus far in 2020, outstripping all prior records, and many more have filed to go public by the end of the year. While in the past, most SPACs were taken public by boutique investment bankers and raised tens of millions of dollars, today, nearly every "bulge bracket" firm has led a SPACs deal, with proceeds up to hundreds of millions or even billions of dollars.

    In SEC Audits, Advisory, IPOs

    Unfazed by Regulatory Risks, Chinese Companies Upsize U.S. IPOs in Q3

    Q3 IPO proceeds up by 350% to $5.9 billion YoY

    Sustaining momentum may require clarity on listing and audit standards

    Despite a directive from a White House working group that could lead the SEC to close the door to companies whose auditors are not PCAOB-inspected, Chinese companies continued to raise significant amounts of capital on U.S. exchanges in the third quarter of 2020.

    In Investing in China, IPOs

    White House Weighs in on China Audit Conundrum

    Can the “co-audit” concept untangle PCAOB inspection impasse?

    On August 7th, the President's Working Group on Financial Markets weighed in on the dangers that investing in Chinese companies posed to U.S. investors. This report is the latest salvo following the passage of Senate's Holding Foreign Companies Accountable Act in May and an SEC roundtable on the risks of investing in emerging markets in July.

    In SEC Audits

    Auditors Face Access Challenges as COVID Pandemic Drags On

    The COVID-19 pandemic has created novel challenges for the audit profession that could have lingering impacts on the quality and reliability of independent accounting firm’s work if not carefully addressed. The increased reliance on remote auditing needs to be carefully managed particularly for auditors with clients in areas like China and Europe, where travel restrictions limit site visits compared to domestic locations that can be visited with COVID protocols in place. Management, audit committees, and investors all need to be aware of the limitations that auditors are operating under and the steps that can be taken to ensure that audit quality remains robust during this period.

    In SEC Audits

    Despite Risks, Chinese Companies Continue to Flock to U.S. Exchanges

    Reading the headlines, one would think that this would be the worst of all possible moments for a Chinese company to contemplate a U.S. IPO. Tensions over issues ranging from trade to managing the COVID-19 pandemic are at a boiling point. The Senate recently passed legislation requiring the SEC to delist Chinese companies whose auditors do not comply with U.S. regulators' inspections. Some commentators have predicted a looming “divorce” between the world’s two largest economies.

    In IPOs

    Is China Getting Serious About Accounting & Governance?

    CSRC signals open to international cooperation on inspections

    For years I have heard a familiar refrain from American investors: They would love to be able to participate in China’s economic growth, if only they could trust the accuracy of the accounting. Unfortunately, episodic blowups of listed Chinese companies have sown doubts about the reliability of their financial reporting and governance practices. In cases when serious problems emerged, there was limited recourse available to hold management accountable or secure compensation.

    In Investing in China

    Guidance in the Season of the COVID-19 Virus

    As the Dow Jones officially entered bear market territory and the WHO declared COVID-19 to be a pandemic, over 150 companies have lowered or withdrawn their earnings guidance as of March 11, 2020. As an increasing number of countries take dramatic steps to slow the spread of the virus and the disruption to business operations increases, that list is sure to grow.

    In Advisory
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