For years, the global auditing and consulting firm PricewaterhouseCoopers was a dominant player in China, helping the country’s biggest companies reap big gains — and enriching itself along the way.
Now, it has become targeted in a sweeping crackdown by Beijing that imperils the future of its business in China, charged with enabling the sprawling financial misdeeds committed by China Evergrande Group, once China’s leading real estate developer.
The Ministry of Finance and the China Securities Regulatory Commission on Friday suspended PwC’s operations in China for six months and fined the firm $62 million — the largest fine levied on an auditing firm in China.
PwC “knew that Evergrande made material misstatements in its financial statements for the years from 2018 to 2020,” the ministry said, adding that the auditing firm had also “failed to point them out, issuing an inappropriate audit opinion and a falsified audit report.”
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In a statement, Mohamed Kande, the global chair of PwC, said the work of its auditors in China was “completely unacceptable.” The company said it had cooperated with Chinese regulators and would comply with the penalties they imposed.
The firm said it had fired six partners, along with other staff members, involved in the Evergrande audit work. “It is not representative of what we stand for as a network, and there is no room for this at PwC,” Mr. Kande said.
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