U.S. regulators have charged the Chinese-based operations of five of the world’s top accounting firms for allegedly blocking fraud investigations.

The U.S. Securities and Exchange Commission wants the firms, including Deloitte & Touche, Ernst & Young, KPMG, PricewaterhouseCoopers and BDO, to handover audit information relating to nine U.S. listed Chinese firms suspected of possible wrongdoing.

But the accounting firms say they are prevented from doing so by Chinese law which says that Chinese company records can be claimed as state secrets.

The BBC’s Andrew Wood in Hong Kong says it does raise questions about mainland Chinese companies listing on U.S. stock markets.

“Listing in America is a lot more prestigious than listing in Shanghai or Shenzen or even Hong Kong and there is a much bigger market for their shares,” he says. “But there have been plenty of allegations against Chinese companies that their accounting standards are just not high enough.”

He also says that there could be a mass exodus of Chinese companies from U.S. stock markets as a result of this SEC investigation. A hearing will be scheduled soon.