3- Acme, Inc., a multinational company based in the United States, has a large subsidiary located in Beijing, China. Acme is audited by an international accounting firm headquartered in the United States; its subsidiary is audited by the Chinese affiliateof that firm. Under U.S. auditing standards, what responsibilities, if any, does Acme’s U.S. audit firm have to supervise or oversee the audit of the Chinese subsidiary? Would these responsibilities be different under International Standards of Auditing? This scenario is similar to that of D&T Shanghai auditing Longtop Financial Technologies. Deloitte Touche Tohmatsu CPA Ltd. Operates worldwide but has a Chinese affiliate (D & T Shanghai) that is allowed to audit Chinese companies in mainland China. Chinese officials have blocked any outside, non-domestic, auditing firms or accounting standard setting entities from inspecting mainland Chinese firms because they say it their firms are “adequate” (Knapp, 2018, p.489). While Deloitte had given Lontop a clean bill of health for the past six years, they wrote a letter on the seventh year that stated they would no longer be the audit firm for Longtop. Even though Deloitte thought they could rely on the bank branches for accurate numbers, they did not anticipate that the bankers could be in on the fraudulent activity. The PCAOB requires that there must be inspections for accounting firms that audit companies whose securities trade in the United States, but since China refused, it has caused a standoff (Norris, 2011).