US authorities slapped fines against PwC units and a Chinese firm over violation of American accounting rules and standards, including the issuance of a false audit report.
The Public Company Accounting Oversight Board (PCAOB) has settled three disciplinary orders as part of a previous deal that gained access to inspect and investigate the audit papers of Chinese firms for the first time ever.
According to a statement, two disciplinary orders were imposed against Shanghai-based PricewaterhouseCoopers Zhong Tian, LLP (PwC China) and Hong Kong-based PricewaterhouseCoopers (PwC Hong Kong), including a $3 million and $4 million fine, respectively, over violation of «quality control standards related to integrity and personnel management».
Another disciplinary order and $940,000 in fines were issued against individuals at mainland China-based Shandong Haoxin Certified Public Accountants and four associated persons for violations that include «issuing a false audit report, failing to maintain independence from their issuer client and improperly adopting the work of another accounting firm as their own».
«Historic Access»
In December 2022, the PCAOB managed to obtain «historic access» to Chinese companies’ audit papers which allowed them to avoid mass US delistings.
«The days of China-based firms evading accountability are over. The PCAOB will take action to protect investors on US markets and impose tough sanctions against anyone who violates PCAOB rules and standards, no matter where they are located,» said PCAOB chair Erica Williams.
«I want to thank the US Congress for its leadership in passing the Holding Foreign Companies Accountable Act, which created the leverage for the PCAOB to secure the historic access, which made these enforcement actions possible.»
