China Fines PwC $62 Million, Suspends Operations for Six Months Over Evergrande Audit

Sep 13, 2024, 08:40 AM

Chinese authorities have imposed significant penalties on PwC China for its auditing failures related to the collapsed property developer Evergrande. The Ministry of Finance and the China Securities Regulatory Commission have fined PwC China a total of 441 million yuan ($62 million) and suspended its operations in mainland China for six months. The penalties include the confiscation of revenue involved in the Evergrande case totaling 27.7 million yuan and a fine of 297 million yuan by the securities regulator. PwC's Guangzhou office has been ordered to shut down. The authorities cited PwC's inadequate auditing practices, which included inaccurate working papers, ineffective onsite inspections, and inadequate sampling. PwC was found to have helped cover up and condone Evergrande's fraud, seriously eroding the basis of law and good faith, and damaging investors' interests. PwC China’s current boss is Daniel Li, who was previously head of the audit business. PwC had been auditing Evergrande since 2009.