Dealing with the Darker Side of Globalization


As linear as they look at times, human surroundings are largely fragmented into different pieces. All these pieces function as separate ecosystems in their own right, which unfortunately also means that they struggle with their own set of problems. It’s not say that they never have their moment in the sunlight, but even during such moments, the isolated ecosystems never really look totally indestructible. A scenario of this sort is apparent mainly due to the stark imbalance observed within the said areas. Time and again, we witness certain industry players trying to upstage their competitors through unsporting tactics, therefore birthing a toxic vibe across the board and causing casualties left right and center. To curb the devastating effects created in spades by such a situation, we have established dedicated regulatory forces, which are essentially responsible for taking proactive measures against activities that can be detrimental to a large-scale population. Over the years, these appointed watchdogs have grown exponentially in size, becoming more and more equipped to supervise a wider spectrum. With globalization taking off, they are now also supposed to look over international companies, and as far as this particular aspect is concerned, it hasn’t quite been a smooth ride. In a bid to defog the picture a little bit, U.S, governing powers have now taken a major decision.

The Securities and Exchange Commission has officially given its green light to a rule that will see foreign companies getting chucked out U.S. exchanges, if their auditors aren’t inspected by the American regulators. Signed by the former President, Donald Trump, the new law has been in the pipeline for a while now. The initial framework of it was put into use earlier in September by Public Company Accounting Oversight Board, and following the approval from SEC, the board will now actively explore their rights to audit companies from different jurisdictions. In a case where the company is found to have provided inadequate disclosures, the commission would retain the power to impose a trading ban. It must be noted, however, the rule only applies to organizations whose auditors haven’t been inspected in over 3 years.

“This is an important step to protect U.S. investors. I believe it is critical that the Commission and the PCAOB work together to ensure that the auditors of foreign companies accessing U.S. capital markets play by the same rules,” said Gary Gensler, Chairman of SEC.


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