HONG KONG: Chinese regulators hit PwC's mainland China unit with a six-month suspension and a record fine of 441 million yuan (US$62 million) on Friday over the firm's audit of troubled property deve
FILE PHOTO: A building housing the PricewaterhouseCoopers branch office stands behind a Chinese national flag in Beijing January 24, 2014. REUTERS/Kim Kyung-Hoon/File PhotoHONG KONG: Chinese regulators hit PwC's mainland China unit with a six-month suspension and a record fine of 441 million yuan on Friday over the firm's
Chinese authorities have been examining PwC's role in Evergrande's accounting practices since the CSRC accused the developer in March of a us$78-billion fraud over a period of two years through 2020.The business suspension and fines are the toughest ever received by a Big Four accounting firm in China, and come against the backdrop of an exodus of clientele and layoffs at the firm in recent months.
PwC Zhong Tian will be barred from signing off on certain key documents for clients in mainland China such as results and IPO applications for the next six months. "We are disappointed by PwC Zhong Tian's audit work of Hengda, which fell unacceptably below the standards we expect of member firms of the PwC network," PwC network, the alliance of PwC's global member units, said in a statement.
The MOF said both PwC Zhong Tian and its Guangzhou branch were aware of"material misstatements" in the audit of the developer between 2018 and 2020 but failed to point them out, and even issued false audit reports. The CSRC probe found that 88 per cent of PwC's observation records on Evergrande's real estate projects in 2019 and 2020 were inauthentic or untrue, making its audit working papers"severely unreliable".
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