Deloitte asks court to dismiss SEC audit case; cites China deal WASHINGTON (Reuters) - The Chinese unit of accounting firm Deloitte on Tuesday asked a federal judge to dismiss efforts by U.S. regulators to obtain audit work papers through the courts, saying the documents may be obtained under a deal struck last week between China and the U.S. audit watchdog. Lawyers for Deloitte Touche Tohmatsu CPA, LTC. argued in a court filing that the Securities and Exchange Commission has "alternative means" to get the documents, which the SEC says it needs as part of its fraud investigation of Deloitte client Longtop Financial Technologies Ltd. The filing by Deloitte came just a few days after the Public Company Accounting Oversight Board and Chinese regulators struck a partial deal after a two-year stand-off that has blocked the United States from probing accounting scandals at dozens of Chinese firms listed on U.S. stock exchanges. The deal is limited in scope. It would allow for document sharing only on enforcement cases against auditors who violate rules. But it would not permit routine onsite inspections of Chinese firms auditing the books of U.S.-traded companies, something the U.S. auditing overseer is permitted to do in most other countries. In addition, the deal would only allow the PCAOB to share documents from audit firms with the SEC if they were obtained for a PCAOB enforcement action. "The provides the SEC with an additional alternative means to obtain and use the documents requested in its subpoena here - that is, directly from the PCAOB," Deloitte's lawyers wrote. The SEC has been probing accounting scandals at Chinese companies for the past few years. Its efforts have led to numerous delistings on stock exchanges after the companies disclosed accounting irregularities and auditor resignations. But the auditors of the companies, which include the Chinese units of the Big 4 accounting firms, have refused to hand over their audit work, saying Chinese secrecy laws prohibit doing so. In September 2011, the SEC asked the federal district court in the District of Columbia to enforce a subpoena it sent Deloitte in connection with audit work it performed for Longtop. Longtop was charged by the SEC two months later with failing to file timely financial reports, and the SEC has said it suspects the company of committing fraud. The action was placed on hold while the SEC tried to negotiate with the Chinese, but the case resumed after talks with the Chinese broke down. In December, the SEC charged the Chinese affiliates of accounting firms Deloitte, KPMG, PricewaterhouseCoopers, BDO and Ernst & Young with securities violations for refusing to produce documents in a separate case that is still pending in the SEC's administrative court. An SEC spokesman declined to comment about Deloitte's request on Tuesday to have the case dismissed, but noted the agency's next court filing on the case is expected by May 30. In a statement last week, however, SEC Commissioner Luis Aguilar said the PCAOB's deal with China "has no direct effect on the commission's pending actions to enforce the obligations" of audit firms in China. "Deloitte can simply just end the situation by producing the records," said Jim Cox, a professor at the Duke University School of Law. This strikes me as little more than a smoke screen and the SEC would be well advised to keep this matter before the federal court. Reporting by Sarah N. Lynch; additional reporting by Nanette Byrnes in Chapel Hill, N.C.; Editing by Dan Grebler