U.S. and Chinese authorities have reached a tentative agreement to begin sending American audit-firm inspectors to China as observers—a step that regulators hope will help pave the way for full U.S. scrutiny of Chinese firms that audit U.S.-traded companies. The U.S. and China have tentatively agreed on "observational visits" in which inspectors from the Public Company Accounting Oversight Board, the U.S. audit-industry regulator, would observe Chinese authorities examining and evaluating the work of their local accounting firms. Inspectors from the board conduct regular evaluations of audit firms that audit companies listed on U.S. markets, even if the firms or companies are located overseas. But the Chinese government has blocked the inspectors from scrutinizing Chinese audit firms, citing sovereignty concerns. The board has said it needs access to the Chinese firms to protect U.S. investors: