KPMG and PwC faulted by US regulator over Chinese audits
Financial Times
23-05-10 17:19
The US’ Public Company Accounting Oversight Board (PCAOB) has identified multiple deficiencies in audits carried out by KPMG and PricewaterhouseCoopers (PwC) in Hong Kong and mainland China. The Chinese arms of the accounting firms were subjected to the first inspections carried out under an agreement with China finalised late last year. Inspectors examined audits carried out by both KPMG Huazhen and PwC. All four audits examined carried out by KPMG Huazhen were problematic. Three out of four PwC audits were also found to be unacceptable. The PCAOB, which is tasked with overseeing auditors of US-listed firms throughout the world, has pledged to expand such examinations in future. A fresh round of inspections will include the audit firms which cover almost all the remaining 60% of US-listed Chinese stocks. KPMG Huazhen and PwC audit around 40% of such shares by market capitalisation.