{"id":1000897103,"date":"2024-09-13T12:40:57","date_gmt":"2024-09-13T16:40:57","guid":{"rendered":"https:\/\/www.goingconcern.com\/?p=1000897103"},"modified":"2024-09-13T12:40:57","modified_gmt":"2024-09-13T16:40:57","slug":"china-puts-pwc-in-the-punishment-corner-for-six-months-and-confiscates-illegal-gains","status":"publish","type":"post","link":"https:\/\/www.goingconcern.com\/china-puts-pwc-in-the-punishment-corner-for-six-months-and-confiscates-illegal-gains\/","title":{"rendered":"China Puts PwC in the Punishment Corner For Six Months and Confiscates ‘Illegal Gains’"},"content":{"rendered":"\n

Well we knew this was going to happen. Various media outlets are reporting that China has banned PwC Zhong Tian (a.k.a. PwC China) from signing off on accounts for six months in relation to their sloppy work on collapsed developer Evergrande. See earlier: China\u2019s About to Dropkick PwC Right in the Wallet<\/a><\/p>\n\n\n\n

Wrote AP<\/a>:<\/p>\n\n\n\n

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China\u2019s Ministry of Finance said in a statement Friday that it was imposing 116 million yuan ($16.35 million) in fines and confiscation of illegal gains on PwC Zhong Tian, also known as PwC China, as well as a six-month business suspension, revocation of PwC\u2019s Guangzhou branch and an administrative warning.<\/p>\n<\/blockquote>\n\n\n\n

In a separate action, the China Securities Regulatory Commission punished them to the tune of 325 million yuan ($45.8 million). This brings them to a grand total of a little more than $62 million yeeted from their revenue of approximately $1.1 billion (2022 revenue), so a 5.6% hit.<\/p>\n\n\n\n

To date, this is the worst punishment a Big 4 firm has received in China. #1 in something yet again, PwC! You go.<\/p>\n\n\n\n

In a statement addressing the ban, PwC said they are “disappointed” by PwC’s audit work “which fell unacceptably below the standards we expect of member firms of the PwC network.” They also threw some people under the bus:<\/p>\n\n\n\n

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PwC China has a long history of high quality audits and we do not believe that the behaviour of a very small number of engagement team members is representative of the work of the vast majority of PwC China\u2019s 18,000 professionals.<\/p>\n<\/blockquote>\n\n\n\n

\u201cThe work performed by PwC Zhong Tian\u2019s Hengda audit team fell well below our high expectations and was completely unacceptable,” said PwC Global Chair Mohamed Kande. “It is not representative of what we stand for as a network and there is no room for this at PwC. That is why, following a thorough investigation, we ensured that actions were taken to hold those responsible to account and a comprehensive remediation programme will build a stronger PwC China firm for the future. China remains an important part of the PwC network and I remain confident in the China firm\u2019s partners and staff as we work together to rebuild trust with stakeholders.”<\/p>\n\n\n\n

PwC China and its Governance Board, with support from the PwC network, took a few accountability and remedial actions to address this matter. They:<\/p>\n\n\n\n