China has suspended auditing firm PricewaterhouseCoopers’ (PwC) business in the country for six-months. The move was announced by the country’s finance ministry on Friday. Moreover, it has also slapped the audit firm with a $ 62 million fine, according to Reuters.
“PwC has seriously eroded the basis of law and good faith, and damaged investors’ interest,” said the China Securities Regulatory Commission (CSRC) in a statement.
PwC has been on the radar of China’s securities regulator since March. The audit firm inflated the revenues of Chinese property developer Evergrande by nearly $80 billion in the two years prior to the developer defaulting with its debts in 2021.
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Also, PwC lost one of its major clients after Country Garden Holdings left China, adding more trouble to the audit firm. Following the Chinese government’s guidelines, Bank of China (BOC), China Life Insurance, PICC, China Taiping Insurance and China Cinda Asset Management dropped PwC as their auditor.
The current move is in line with previous concerns raised by Chinese authorities over data securities. The authorities requested companies to phase out auditing done by the big fours.
Previously, on September 12, PwC announced a major layoff in the US across different roles, including associates, managing directors and verticals like business services, audit, and tax, according to the Wall Street Journal.
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“To remain competitive and position our business for the future, we are continuing to transform areas of our firm and are aligning our workforce to better support our strategy,” WSJ quoted PwC’s US chief operating officer, Tim Grady.
It is the largest job cut by the company since 2009 and will lead to nearly 1,800 job losses and will impact around 2.5 per cent of its US workforce.
