STORY: Chinese regulators are expected to give PricewaterhouseCoopers’ (PwC) China unit a six month business ban…
…part of the company’s punishment over its audit of troubled property giant China Evergrande Group.
That’s according to five sources.
PwC came under scrutiny for its role in auditing Evergrande after China’s security regulator in March accused the property developer of a $78 billion fraud.
PwC audited Evergrande for almost 14 years until early 2023.
Combined with a fine of $56 million, this action against PwC marks the toughest ever penalty received by a Big Four accounting firm in China, three sources said.
They added that the six-month ban will focus on the securities-related business within PwC Zhong Tian – the main onshore arm of PwC in China.
Sources said the firm would be barred from signing off on certain key documents for clients in mainland China such as results and IPO applications.
The looming penalties have caused turbulence for PwC.
Sources said it has led to an exodus of clientele and prompted cost cuts and layoffs at the firm in recent months.
The business suspension could also affect PwC Zhong Tian from taking on new state-owned or listed clients in the next three years, as per Chinese regulations.
The watchdog’s punitive measures, which sources say are yet to be finalized, could seriously cloud the firm’s prospects in the world’s second-largest economy.
